Correlation Between Shandong Iron and Dow Jones
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By analyzing existing cross correlation between Shandong Iron and and Dow Jones Industrial, you can compare the effects of market volatilities on Shandong Iron 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 Shandong Iron with a short position of Dow Jones. Check out your portfolio center. Please also check ongoing floating volatility patterns of Shandong Iron and Dow Jones.
Diversification Opportunities for Shandong Iron and Dow Jones
0.65 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Shandong and Dow is 0.65. Overlapping area represents the amount of risk that can be diversified away by holding Shandong Iron and 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 Shandong Iron 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 Shandong Iron and 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 Shandong Iron i.e., Shandong Iron and Dow Jones go up and down completely randomly.
Pair Corralation between Shandong Iron and Dow Jones
Assuming the 90 days trading horizon Shandong Iron and is expected to generate 4.47 times more return on investment than Dow Jones. However, Shandong Iron is 4.47 times more volatile than Dow Jones Industrial. It trades about 0.13 of its potential returns per unit of risk. Dow Jones Industrial is currently generating about -0.01 per unit of risk. If you would invest 157.00 in Shandong Iron and on September 14, 2024 and sell it today you would earn a total of 10.00 from holding Shandong Iron and or generate 6.37% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 95.45% |
| Values | Daily Returns |
Shandong Iron and vs. Dow Jones Industrial
Performance |
| Timeline |
Shandong Iron and Dow Jones Volatility Contrast
Predicted Return Density |
| Returns |
Shandong Iron and
Pair trading matchups for Shandong Iron
Dow Jones Industrial
Pair trading matchups for Dow Jones
Pair Trading with Shandong Iron and Dow Jones
The main advantage of trading using opposite Shandong Iron and Dow Jones positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Shandong Iron 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.| Shandong Iron vs. Allied Machinery Co | Shandong Iron vs. Tengda Construction Group | Shandong Iron vs. Tsingtao Brewery Co | Shandong Iron vs. China Life Insurance |
| 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 Headlines Timeline module to stay connected to all market stories and filter out noise. Drill down to analyze hype elasticity.
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