Correlation Between Shanghai Phichem and Dow Jones
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By analyzing existing cross correlation between Shanghai Phichem Material and Dow Jones Industrial, you can compare the effects of market volatilities on Shanghai Phichem 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 Shanghai Phichem with a short position of Dow Jones. Check out your portfolio center. Please also check ongoing floating volatility patterns of Shanghai Phichem and Dow Jones.
Diversification Opportunities for Shanghai Phichem and Dow Jones
0.76 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Shanghai and Dow is 0.76. Overlapping area represents the amount of risk that can be diversified away by holding Shanghai Phichem Material 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 Shanghai Phichem 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 Shanghai Phichem Material 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 Shanghai Phichem i.e., Shanghai Phichem and Dow Jones go up and down completely randomly.
Pair Corralation between Shanghai Phichem and Dow Jones
Assuming the 90 days trading horizon Shanghai Phichem Material is expected to under-perform the Dow Jones. In addition to that, Shanghai Phichem is 2.46 times more volatile than Dow Jones Industrial. It trades about -0.34 of its total potential returns per unit of risk. Dow Jones Industrial is currently generating about -0.26 per unit of volatility. If you would invest 4,382,806 in Dow Jones Industrial on October 14, 2024 and sell it today you would lose (188,961) from holding Dow Jones Industrial or give up 4.31% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 95.24% |
| Values | Daily Returns |
Shanghai Phichem Material vs. Dow Jones Industrial
Performance |
| Timeline |
Shanghai Phichem and Dow Jones Volatility Contrast
Predicted Return Density |
| Returns |
Shanghai Phichem Material
Pair trading matchups for Shanghai Phichem
Dow Jones Industrial
Pair trading matchups for Dow Jones
Pair Trading with Shanghai Phichem and Dow Jones
The main advantage of trading using opposite Shanghai Phichem and Dow Jones positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Shanghai Phichem 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.| Shanghai Phichem vs. Tongling Nonferrous Metals | Shanghai Phichem vs. Beijing Bewinner Communications | Shanghai Phichem vs. Fiberhome Telecommunication Technologies | Shanghai Phichem vs. Hainan Airlines Co |
| Dow Jones vs. Chipotle Mexican Grill | Dow Jones vs. Teleflex Incorporated | Dow Jones vs. Dine Brands Global | Dow Jones vs. Alvotech |
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 Instant Ratings module to determine any equity ratings based on digital recommendations. Macroaxis instant equity ratings are based on combination of fundamental analysis and risk-adjusted market performance.
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