Correlation Between China Fortune and Dow Jones
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By analyzing existing cross correlation between China Fortune Land and Dow Jones Industrial, you can compare the effects of market volatilities on China Fortune 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 Fortune with a short position of Dow Jones. Check out your portfolio center. Please also check ongoing floating volatility patterns of China Fortune and Dow Jones.
Diversification Opportunities for China Fortune and Dow Jones
0.76 | Correlation Coefficient |
Poor diversification
The 3 months correlation between China and Dow is 0.76. Overlapping area represents the amount of risk that can be diversified away by holding China Fortune Land 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 Fortune 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 Fortune Land 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 Fortune i.e., China Fortune and Dow Jones go up and down completely randomly.
Pair Corralation between China Fortune and Dow Jones
Assuming the 90 days trading horizon China Fortune Land is expected to generate 8.11 times more return on investment than Dow Jones. However, China Fortune is 8.11 times more volatile than Dow Jones Industrial. It trades about 0.3 of its potential returns per unit of risk. Dow Jones Industrial is currently generating about 0.18 per unit of risk. If you would invest 103.00 in China Fortune Land on August 28, 2024 and sell it today you would earn a total of 170.00 from holding China Fortune Land or generate 165.05% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 90.63% |
| Values | Daily Returns |
China Fortune Land vs. Dow Jones Industrial
Performance |
| Timeline |
China Fortune and Dow Jones Volatility Contrast
Predicted Return Density |
| Returns |
China Fortune Land
Pair trading matchups for China Fortune
Dow Jones Industrial
Pair trading matchups for Dow Jones
Pair Trading with China Fortune and Dow Jones
The main advantage of trading using opposite China Fortune and Dow Jones positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if China Fortune 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 Fortune vs. Shanghai Action Education | China Fortune vs. Changjiang Publishing Media | China Fortune vs. Zhejiang Publishing Media | China Fortune vs. Zoje Resources Investment |
| 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 Analyst Advice module to analyst recommendations and target price estimates broken down by several categories.
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