Correlation Between China Petroleum and Dow Jones
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By analyzing existing cross correlation between China Petroleum Chemical and Dow Jones Industrial, you can compare the effects of market volatilities on China Petroleum 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 Petroleum with a short position of Dow Jones. Check out your portfolio center. Please also check ongoing floating volatility patterns of China Petroleum and Dow Jones.
Diversification Opportunities for China Petroleum and Dow Jones
-0.57 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between China and Dow is -0.57. Overlapping area represents the amount of risk that can be diversified away by holding China Petroleum 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 China Petroleum 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 Petroleum 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 China Petroleum i.e., China Petroleum and Dow Jones go up and down completely randomly.
Pair Corralation between China Petroleum and Dow Jones
Assuming the 90 days trading horizon China Petroleum Chemical is expected to under-perform the Dow Jones. In addition to that, China Petroleum is 1.16 times more volatile than Dow Jones Industrial. It trades about -0.06 of its total potential returns per unit of risk. Dow Jones Industrial is currently generating about 0.26 per unit of volatility. If you would invest 4,238,757 in Dow Jones Industrial on August 28, 2024 and sell it today you would earn a total of 234,900 from holding Dow Jones Industrial or generate 5.54% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
China Petroleum Chemical vs. Dow Jones Industrial
Performance |
| Timeline |
China Petroleum and Dow Jones Volatility Contrast
Predicted Return Density |
| Returns |
China Petroleum Chemical
Pair trading matchups for China Petroleum
Dow Jones Industrial
Pair trading matchups for Dow Jones
Pair Trading with China Petroleum and Dow Jones
The main advantage of trading using opposite China Petroleum and Dow Jones positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if China Petroleum 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 Petroleum vs. Hefei Metalforming Mach | China Petroleum vs. Xinjiang Baodi Mining | China Petroleum vs. Guangdong Jingyi Metal | China Petroleum vs. Hainan Mining Co |
| Dow Jones vs. CECO Environmental Corp | Dow Jones vs. Western Acquisition Ventures | Dow Jones vs. Tyson Foods | Dow Jones vs. Inflection Point Acquisition |
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 Optimization module to compute new portfolio that will generate highest expected return given your specified tolerance for risk.
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