Correlation Between Porton Fine and Dow Jones
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By analyzing existing cross correlation between Porton Fine Chemicals and Dow Jones Industrial, you can compare the effects of market volatilities on Porton Fine and Dow Jones and check how they will diversify away market risk if combined in the same portfolio for a given time horizon. You can also utilize pair trading strategies of matching a long position in Porton Fine with a short position of Dow Jones. Check out your portfolio center. Please also check ongoing floating volatility patterns of Porton Fine and Dow Jones.
Diversification Opportunities for Porton Fine and Dow Jones
0.66 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Porton and Dow is 0.66. Overlapping area represents the amount of risk that can be diversified away by holding Porton Fine Chemicals and Dow Jones Industrial in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Dow Jones Industrial and Porton Fine is a relative statistical measure of the degree to which these equity instruments tend to move together. The correlation coefficient measures the extent to which returns on Porton Fine Chemicals are associated (or correlated) with Dow Jones. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Dow Jones Industrial has no effect on the direction of Porton Fine i.e., Porton Fine and Dow Jones go up and down completely randomly.
Pair Corralation between Porton Fine and Dow Jones
Assuming the 90 days trading horizon Porton Fine Chemicals is expected to under-perform the Dow Jones. In addition to that, Porton Fine is 4.71 times more volatile than Dow Jones Industrial. It trades about -0.04 of its total potential returns per unit of risk. Dow Jones Industrial is currently generating about 0.09 per unit of volatility. If you would invest 3,351,765 in Dow Jones Industrial on August 31, 2024 and sell it today you would earn a total of 1,139,300 from holding Dow Jones Industrial or generate 33.99% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 95.61% |
| Values | Daily Returns |
Porton Fine Chemicals vs. Dow Jones Industrial
Performance |
| Timeline |
Porton Fine and Dow Jones Volatility Contrast
Predicted Return Density |
| Returns |
Porton Fine Chemicals
Pair trading matchups for Porton Fine
Dow Jones Industrial
Pair trading matchups for Dow Jones
Pair Trading with Porton Fine and Dow Jones
The main advantage of trading using opposite Porton Fine and Dow Jones positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Porton Fine position performs unexpectedly, Dow Jones can make up some of the losses. Pair trading also minimizes risk from directional movements in the market. For example, if an entire industry or sector drops because of unexpected headlines, the short position in Dow Jones will offset losses from the drop in Dow Jones' long position.| Porton Fine vs. PetroChina Co Ltd | Porton Fine vs. China Mobile Limited | Porton Fine vs. Ping An Insurance | Porton Fine vs. China Petroleum Chemical |
| Dow Jones vs. Aerofoam Metals | Dow Jones vs. ACG Metals Limited | Dow Jones vs. China Clean Energy | Dow Jones vs. Fast Retailing Co |
Check out your portfolio center.Note that this page's information should be used as a complementary analysis to find the right mix of equity instruments to add to your existing portfolios or create a brand new portfolio. You can also try the Price Exposure Probability module to analyze equity upside and downside potential for a given time horizon across multiple markets.
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