Correlation Between China World and Dow Jones
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By analyzing existing cross correlation between China World Trade and Dow Jones Industrial, you can compare the effects of market volatilities on China World 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 China World with a short position of Dow Jones. Check out your portfolio center. Please also check ongoing floating volatility patterns of China World and Dow Jones.
Diversification Opportunities for China World and Dow Jones
0.28 | Correlation Coefficient |
Modest diversification
The 3 months correlation between China and Dow is 0.28. Overlapping area represents the amount of risk that can be diversified away by holding China World Trade 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 China World 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 China World Trade 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 China World i.e., China World and Dow Jones go up and down completely randomly.
Pair Corralation between China World and Dow Jones
Assuming the 90 days trading horizon China World Trade is expected to under-perform the Dow Jones. In addition to that, China World is 1.36 times more volatile than Dow Jones Industrial. It trades about -0.22 of its total potential returns per unit of risk. Dow Jones Industrial is currently generating about 0.21 per unit of volatility. If you would invest 4,237,436 in Dow Jones Industrial on August 25, 2024 and sell it today you would earn a total of 192,215 from holding Dow Jones Industrial or generate 4.54% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 95.65% |
| Values | Daily Returns |
China World Trade vs. Dow Jones Industrial
Performance |
| Timeline |
China World and Dow Jones Volatility Contrast
Predicted Return Density |
| Returns |
China World Trade
Pair trading matchups for China World
Dow Jones Industrial
Pair trading matchups for Dow Jones
Pair Trading with China World and Dow Jones
The main advantage of trading using opposite China World and Dow Jones positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if China World 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.| China World vs. Industrial and Commercial | China World vs. China Construction Bank | China World vs. Bank of China | China World vs. Agricultural Bank of |
| Dow Jones vs. Vistra Energy Corp | Dow Jones vs. Fluence Energy | Dow Jones vs. Old Republic International | Dow Jones vs. Empresa Distribuidora y |
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 Funds Screener module to find actively-traded funds from around the world traded on over 30 global exchanges.
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