Correlation Between China Enterprise and Dow Jones
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By analyzing existing cross correlation between China Enterprise Co and Dow Jones Industrial, you can compare the effects of market volatilities on China Enterprise 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 Enterprise with a short position of Dow Jones. Check out your portfolio center. Please also check ongoing floating volatility patterns of China Enterprise and Dow Jones.
Diversification Opportunities for China Enterprise and Dow Jones
0.23 | Correlation Coefficient |
Modest diversification
The 3 months correlation between China and Dow is 0.23. Overlapping area represents the amount of risk that can be diversified away by holding China Enterprise Co 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 Enterprise 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 Enterprise Co 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 Enterprise i.e., China Enterprise and Dow Jones go up and down completely randomly.
Pair Corralation between China Enterprise and Dow Jones
Assuming the 90 days trading horizon China Enterprise is expected to generate 1.6 times less return on investment than Dow Jones. In addition to that, China Enterprise is 3.99 times more volatile than Dow Jones Industrial. It trades about 0.01 of its total potential returns per unit of risk. Dow Jones Industrial is currently generating about 0.08 per unit of volatility. If you would invest 3,351,765 in Dow Jones Industrial on September 28, 2024 and sell it today you would earn a total of 980,815 from holding Dow Jones Industrial or generate 29.26% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 96.17% |
| Values | Daily Returns |
China Enterprise Co vs. Dow Jones Industrial
Performance |
| Timeline |
China Enterprise and Dow Jones Volatility Contrast
Predicted Return Density |
| Returns |
China Enterprise Co
Pair trading matchups for China Enterprise
Dow Jones Industrial
Pair trading matchups for Dow Jones
Pair Trading with China Enterprise and Dow Jones
The main advantage of trading using opposite China Enterprise and Dow Jones positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if China Enterprise 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 Enterprise vs. Tongyu Communication | China Enterprise vs. Miracll Chemicals Co | China Enterprise vs. Fiberhome Telecommunication Technologies | China Enterprise vs. SUNSEA Telecommunications Co |
| Dow Jones vs. Copa Holdings SA | Dow Jones vs. Delta Air Lines | Dow Jones vs. Azul SA | Dow Jones vs. SkyWest |
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 Dashboard module to portfolio dashboard that provides centralized access to all your investments.
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