Correlation Between AVIC Heavy and Dow Jones
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By analyzing existing cross correlation between AVIC Heavy Machinery and Dow Jones Industrial, you can compare the effects of market volatilities on AVIC Heavy 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 AVIC Heavy with a short position of Dow Jones. Check out your portfolio center. Please also check ongoing floating volatility patterns of AVIC Heavy and Dow Jones.
Diversification Opportunities for AVIC Heavy and Dow Jones
0.52 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between AVIC and Dow is 0.52. Overlapping area represents the amount of risk that can be diversified away by holding AVIC Heavy Machinery 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 AVIC Heavy 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 AVIC Heavy Machinery 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 AVIC Heavy i.e., AVIC Heavy and Dow Jones go up and down completely randomly.
Pair Corralation between AVIC Heavy and Dow Jones
Assuming the 90 days trading horizon AVIC Heavy Machinery is expected to under-perform the Dow Jones. In addition to that, AVIC Heavy is 2.74 times more volatile than Dow Jones Industrial. It trades about -0.17 of its total potential returns per unit of risk. Dow Jones Industrial is currently generating about 0.37 per unit of volatility. If you would invest 4,179,460 in Dow Jones Industrial on September 5, 2024 and sell it today you would earn a total of 321,944 from holding Dow Jones Industrial or generate 7.7% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 95.65% |
| Values | Daily Returns |
AVIC Heavy Machinery vs. Dow Jones Industrial
Performance |
| Timeline |
AVIC Heavy and Dow Jones Volatility Contrast
Predicted Return Density |
| Returns |
AVIC Heavy Machinery
Pair trading matchups for AVIC Heavy
Dow Jones Industrial
Pair trading matchups for Dow Jones
Pair Trading with AVIC Heavy and Dow Jones
The main advantage of trading using opposite AVIC Heavy and Dow Jones positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if AVIC Heavy 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.| AVIC Heavy vs. Sunwave Communications Co | AVIC Heavy vs. Wintao Communications Co | AVIC Heavy vs. Servyou Software Group | AVIC Heavy vs. Xinjiang Communications Construction |
| Dow Jones vs. Shake Shack | Dow Jones vs. Artisan Partners Asset | Dow Jones vs. Dave Busters Entertainment | Dow Jones vs. Meli Hotels International |
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 Commodity Channel module to use Commodity Channel Index to analyze current equity momentum.
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