Correlation Between Chengdu Bright and Dow Jones
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By analyzing existing cross correlation between Chengdu Bright Eye and Dow Jones Industrial, you can compare the effects of market volatilities on Chengdu Bright 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 Chengdu Bright with a short position of Dow Jones. Check out your portfolio center. Please also check ongoing floating volatility patterns of Chengdu Bright and Dow Jones.
Diversification Opportunities for Chengdu Bright and Dow Jones
0.85 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Chengdu and Dow is 0.85. Overlapping area represents the amount of risk that can be diversified away by holding Chengdu Bright Eye 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 Chengdu Bright 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 Chengdu Bright Eye 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 Chengdu Bright i.e., Chengdu Bright and Dow Jones go up and down completely randomly.
Pair Corralation between Chengdu Bright and Dow Jones
Assuming the 90 days trading horizon Chengdu Bright Eye is expected to generate 7.09 times more return on investment than Dow Jones. However, Chengdu Bright is 7.09 times more volatile than Dow Jones Industrial. It trades about 0.01 of its potential returns per unit of risk. Dow Jones Industrial is currently generating about -0.01 per unit of risk. If you would invest 5,700 in Chengdu Bright Eye on September 14, 2024 and sell it today you would lose (35.00) from holding Chengdu Bright Eye or give up 0.61% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 95.45% |
| Values | Daily Returns |
Chengdu Bright Eye vs. Dow Jones Industrial
Performance |
| Timeline |
Chengdu Bright and Dow Jones Volatility Contrast
Predicted Return Density |
| Returns |
Chengdu Bright Eye
Pair trading matchups for Chengdu Bright
Dow Jones Industrial
Pair trading matchups for Dow Jones
Pair Trading with Chengdu Bright and Dow Jones
The main advantage of trading using opposite Chengdu Bright and Dow Jones positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Chengdu Bright 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.| Chengdu Bright vs. Xiangyu Medical Co | Chengdu Bright vs. Nanjing Medlander Medical | Chengdu Bright vs. Huaxia Fund Management | Chengdu Bright vs. Ningbo MedicalSystem Biotechnology |
| Dow Jones vs. Hurco Companies | Dow Jones vs. Tyson Foods | Dow Jones vs. MYR Group | Dow Jones vs. Cannae Holdings |
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 Performance Analysis module to check effects of mean-variance optimization against your current asset allocation.
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