Correlation Between Dongnan Electronics and Dow Jones
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By analyzing existing cross correlation between Dongnan Electronics Co and Dow Jones Industrial, you can compare the effects of market volatilities on Dongnan Electronics 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 Dongnan Electronics with a short position of Dow Jones. Check out your portfolio center. Please also check ongoing floating volatility patterns of Dongnan Electronics and Dow Jones.
Diversification Opportunities for Dongnan Electronics and Dow Jones
0.74 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Dongnan and Dow is 0.74. Overlapping area represents the amount of risk that can be diversified away by holding Dongnan Electronics Co 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 Dongnan Electronics 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 Dongnan Electronics Co 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 Dongnan Electronics i.e., Dongnan Electronics and Dow Jones go up and down completely randomly.
Pair Corralation between Dongnan Electronics and Dow Jones
Assuming the 90 days trading horizon Dongnan Electronics Co is expected to generate 5.66 times more return on investment than Dow Jones. However, Dongnan Electronics is 5.66 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 0.27 per unit of risk. If you would invest 2,336 in Dongnan Electronics Co on August 30, 2024 and sell it today you would earn a total of 88.00 from holding Dongnan Electronics Co or generate 3.77% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Dongnan Electronics Co vs. Dow Jones Industrial
Performance |
| Timeline |
Dongnan Electronics and Dow Jones Volatility Contrast
Predicted Return Density |
| Returns |
Dongnan Electronics Co
Pair trading matchups for Dongnan Electronics
Dow Jones Industrial
Pair trading matchups for Dow Jones
Pair Trading with Dongnan Electronics and Dow Jones
The main advantage of trading using opposite Dongnan Electronics and Dow Jones positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Dongnan Electronics 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.| Dongnan Electronics vs. PetroChina Co Ltd | Dongnan Electronics vs. China State Construction | Dongnan Electronics vs. China Mobile Limited | Dongnan Electronics vs. Industrial and Commercial |
| Dow Jones vs. Kaltura | Dow Jones vs. Artisan Partners Asset | Dow Jones vs. US Global Investors | Dow Jones vs. Analog Devices |
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 Watchlist Optimization module to optimize watchlists to build efficient portfolios or rebalance existing positions based on the mean-variance optimization algorithm.
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