Correlation Between CCB Principal and Dow Jones
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By analyzing existing cross correlation between CCB Principal Asset and Dow Jones Industrial, you can compare the effects of market volatilities on CCB Principal 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 CCB Principal with a short position of Dow Jones. Check out your portfolio center. Please also check ongoing floating volatility patterns of CCB Principal and Dow Jones.
Diversification Opportunities for CCB Principal and Dow Jones
0.19 | Correlation Coefficient |
Average diversification
The 3 months correlation between CCB and Dow is 0.19. Overlapping area represents the amount of risk that can be diversified away by holding CCB Principal Asset 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 CCB Principal 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 CCB Principal Asset 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 CCB Principal i.e., CCB Principal and Dow Jones go up and down completely randomly.
Pair Corralation between CCB Principal and Dow Jones
Assuming the 90 days trading horizon CCB Principal is expected to generate 214.5 times less return on investment than Dow Jones. But when comparing it to its historical volatility, CCB Principal Asset is 181.65 times less risky than Dow Jones. It trades about 0.19 of its potential returns per unit of risk. Dow Jones Industrial is currently generating about 0.22 of returns per unit of risk over similar time horizon. If you would invest 4,238,757 in Dow Jones Industrial on August 27, 2024 and sell it today you would earn a total of 190,894 from holding Dow Jones Industrial or generate 4.5% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
CCB Principal Asset vs. Dow Jones Industrial
Performance |
| Timeline |
CCB Principal and Dow Jones Volatility Contrast
Predicted Return Density |
| Returns |
CCB Principal Asset
Pair trading matchups for CCB Principal
Dow Jones Industrial
Pair trading matchups for Dow Jones
Pair Trading with CCB Principal and Dow Jones
The main advantage of trading using opposite CCB Principal and Dow Jones positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if CCB Principal 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.| CCB Principal vs. CCB Principal SSE | CCB Principal vs. CCB Principal SZSE | CCB Principal vs. CCB Principal MSCI | CCB Principal vs. 159695 |
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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 Portfolio Center module to all portfolio management and optimization tools to improve performance of your portfolios.
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