Correlation Between Xiamen East and Dow Jones
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By analyzing existing cross correlation between Xiamen East Asia and Dow Jones Industrial, you can compare the effects of market volatilities on Xiamen East 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 Xiamen East with a short position of Dow Jones. Check out your portfolio center. Please also check ongoing floating volatility patterns of Xiamen East and Dow Jones.
Diversification Opportunities for Xiamen East and Dow Jones
0.31 | Correlation Coefficient |
Weak diversification
The 3 months correlation between Xiamen and Dow is 0.31. Overlapping area represents the amount of risk that can be diversified away by holding Xiamen East Asia 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 Xiamen East 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 Xiamen East Asia 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 Xiamen East i.e., Xiamen East and Dow Jones go up and down completely randomly.
Pair Corralation between Xiamen East and Dow Jones
Assuming the 90 days trading horizon Xiamen East Asia is expected to generate 3.66 times more return on investment than Dow Jones. However, Xiamen East is 3.66 times more volatile than Dow Jones Industrial. It trades about 0.06 of its potential returns per unit of risk. Dow Jones Industrial is currently generating about 0.17 per unit of risk. If you would invest 1,088 in Xiamen East Asia on October 23, 2024 and sell it today you would earn a total of 32.00 from holding Xiamen East Asia or generate 2.94% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 95.24% |
| Values | Daily Returns |
Xiamen East Asia vs. Dow Jones Industrial
Performance |
| Timeline |
Xiamen East and Dow Jones Volatility Contrast
Predicted Return Density |
| Returns |
Xiamen East Asia
Pair trading matchups for Xiamen East
Dow Jones Industrial
Pair trading matchups for Dow Jones
Pair Trading with Xiamen East and Dow Jones
The main advantage of trading using opposite Xiamen East and Dow Jones positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Xiamen East 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.| Xiamen East vs. Cabio Biotech Wuhan | Xiamen East vs. Digiwin Software Co | Xiamen East vs. Eyebright Medical Technology | Xiamen East vs. Montage Technology Co |
| Dow Jones vs. Grupo Televisa SAB | Dow Jones vs. NiSource | Dow Jones vs. Kinetik Holdings | Dow Jones vs. Empresa Distribuidora y |
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 Transaction History module to view history of all your transactions and understand their impact on performance.
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