Correlation Between GANGLONG CHINA and Dow Jones
Can any of the company-specific risk be diversified away by investing in both GANGLONG CHINA 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 GANGLONG CHINA and Dow Jones into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between GANGLONG CHINA PRGRLTD and Dow Jones Industrial, you can compare the effects of market volatilities on GANGLONG CHINA 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 GANGLONG CHINA with a short position of Dow Jones. Check out your portfolio center. Please also check ongoing floating volatility patterns of GANGLONG CHINA and Dow Jones.
Diversification Opportunities for GANGLONG CHINA and Dow Jones
-0.33 | Correlation Coefficient |
Very good diversification
The 3 months correlation between GANGLONG and Dow is -0.33. Overlapping area represents the amount of risk that can be diversified away by holding GANGLONG CHINA PRGRLTD 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 GANGLONG CHINA 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 GANGLONG CHINA PRGRLTD 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 GANGLONG CHINA i.e., GANGLONG CHINA and Dow Jones go up and down completely randomly.
Pair Corralation between GANGLONG CHINA and Dow Jones
Assuming the 90 days horizon GANGLONG CHINA PRGRLTD is expected to generate 94.24 times more return on investment than Dow Jones. However, GANGLONG CHINA is 94.24 times more volatile than Dow Jones Industrial. It trades about 0.07 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 7.55 in GANGLONG CHINA PRGRLTD on September 26, 2024 and sell it today you would lose (6.65) from holding GANGLONG CHINA PRGRLTD or give up 88.08% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 98.22% |
| Values | Daily Returns |
GANGLONG CHINA PRGRLTD vs. Dow Jones Industrial
Performance |
| Timeline |
GANGLONG CHINA and Dow Jones Volatility Contrast
Predicted Return Density |
| Returns |
GANGLONG CHINA PRGRLTD
Pair trading matchups for GANGLONG CHINA
Dow Jones Industrial
Pair trading matchups for Dow Jones
Pair Trading with GANGLONG CHINA and Dow Jones
The main advantage of trading using opposite GANGLONG CHINA and Dow Jones positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if GANGLONG CHINA 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.| GANGLONG CHINA vs. China Resources Land | GANGLONG CHINA vs. DEUTSCHE WOHNEN ADRS12 | GANGLONG CHINA vs. CTP NV EO | GANGLONG CHINA vs. SEAZEN GROUP LTD |
| Dow Jones vs. Sabre Corpo | Dow Jones vs. Cannae Holdings | Dow Jones vs. Pekin Life Insurance | Dow Jones vs. Supercom |
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 Alpha Finder module to use alpha and beta coefficients to find investment opportunities after accounting for the risk.
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