Correlation Between Weikeng Industrial and Dow Jones
Can any of the company-specific risk be diversified away by investing in both Weikeng Industrial and Dow Jones at the same time? Although using a correlation coefficient on its own may not help to predict future stock returns, this module helps to understand the diversifiable risk of combining Weikeng Industrial and Dow Jones into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Weikeng Industrial Co and Dow Jones Industrial, you can compare the effects of market volatilities on Weikeng Industrial 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 Weikeng Industrial with a short position of Dow Jones. Check out your portfolio center. Please also check ongoing floating volatility patterns of Weikeng Industrial and Dow Jones.
Diversification Opportunities for Weikeng Industrial and Dow Jones
0.23 | Correlation Coefficient |
Modest diversification
The 3 months correlation between Weikeng and Dow is 0.23. Overlapping area represents the amount of risk that can be diversified away by holding Weikeng Industrial 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 Weikeng Industrial 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 Weikeng Industrial 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 Weikeng Industrial i.e., Weikeng Industrial and Dow Jones go up and down completely randomly.
Pair Corralation between Weikeng Industrial and Dow Jones
Assuming the 90 days trading horizon Weikeng Industrial Co is expected to generate 2.86 times more return on investment than Dow Jones. However, Weikeng Industrial is 2.86 times more volatile than Dow Jones Industrial. It trades about 0.05 of its potential returns per unit of risk. Dow Jones Industrial is currently generating about 0.12 per unit of risk. If you would invest 2,775 in Weikeng Industrial Co on September 14, 2024 and sell it today you would earn a total of 600.00 from holding Weikeng Industrial Co or generate 21.62% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 98.88% |
| Values | Daily Returns |
Weikeng Industrial Co vs. Dow Jones Industrial
Performance |
| Timeline |
Weikeng Industrial and Dow Jones Volatility Contrast
Predicted Return Density |
| Returns |
Weikeng Industrial Co
Pair trading matchups for Weikeng Industrial
Dow Jones Industrial
Pair trading matchups for Dow Jones
Pair Trading with Weikeng Industrial and Dow Jones
The main advantage of trading using opposite Weikeng Industrial and Dow Jones positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Weikeng Industrial 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.| Weikeng Industrial vs. Zenitron Corp | Weikeng Industrial vs. WT Microelectronics Co | Weikeng Industrial vs. Edom Technology Co | Weikeng Industrial vs. Wah Lee Industrial |
| 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 Stocks Directory module to find actively traded stocks across global markets.
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