Correlation Between Jinan Acetate and Dow Jones
Can any of the company-specific risk be diversified away by investing in both Jinan Acetate 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 Jinan Acetate and Dow Jones into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Jinan Acetate Chemical and Dow Jones Industrial, you can compare the effects of market volatilities on Jinan Acetate 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 Jinan Acetate with a short position of Dow Jones. Check out your portfolio center. Please also check ongoing floating volatility patterns of Jinan Acetate and Dow Jones.
Diversification Opportunities for Jinan Acetate and Dow Jones
-0.33 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Jinan and Dow is -0.33. Overlapping area represents the amount of risk that can be diversified away by holding Jinan Acetate Chemical 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 Jinan Acetate 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 Jinan Acetate Chemical 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 Jinan Acetate i.e., Jinan Acetate and Dow Jones go up and down completely randomly.
Pair Corralation between Jinan Acetate and Dow Jones
Assuming the 90 days trading horizon Jinan Acetate Chemical is expected to generate 5.17 times more return on investment than Dow Jones. However, Jinan Acetate is 5.17 times more volatile than Dow Jones Industrial. It trades about 0.11 of its potential returns per unit of risk. Dow Jones Industrial is currently generating about 0.08 per unit of risk. If you would invest 18,085 in Jinan Acetate Chemical on August 30, 2024 and sell it today you would earn a total of 68,715 from holding Jinan Acetate Chemical or generate 379.96% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 96.77% |
| Values | Daily Returns |
Jinan Acetate Chemical vs. Dow Jones Industrial
Performance |
| Timeline |
Jinan Acetate and Dow Jones Volatility Contrast
Predicted Return Density |
| Returns |
Jinan Acetate Chemical
Pair trading matchups for Jinan Acetate
Dow Jones Industrial
Pair trading matchups for Dow Jones
Pair Trading with Jinan Acetate and Dow Jones
The main advantage of trading using opposite Jinan Acetate and Dow Jones positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Jinan Acetate 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.| Jinan Acetate vs. San Fu Chemical | Jinan Acetate vs. Tex Year Industries | Jinan Acetate vs. Concraft Holding Co | Jinan Acetate vs. Coremax Corp |
| Dow Jones vs. Skillful Craftsman Education | Dow Jones vs. Acco Brands | Dow Jones vs. Cracker Barrel Old | Dow Jones vs. Coursera |
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 Equity Analysis module to research over 250,000 global equities including funds, stocks and ETFs to find investment opportunities.
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