Correlation Between Ningbo Thermal and Dow Jones
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By analyzing existing cross correlation between Ningbo Thermal Power and Dow Jones Industrial, you can compare the effects of market volatilities on Ningbo Thermal 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 Ningbo Thermal with a short position of Dow Jones. Check out your portfolio center. Please also check ongoing floating volatility patterns of Ningbo Thermal and Dow Jones.
Diversification Opportunities for Ningbo Thermal and Dow Jones
-0.24 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Ningbo and Dow is -0.24. Overlapping area represents the amount of risk that can be diversified away by holding Ningbo Thermal Power 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 Ningbo Thermal 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 Ningbo Thermal Power 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 Ningbo Thermal i.e., Ningbo Thermal and Dow Jones go up and down completely randomly.
Pair Corralation between Ningbo Thermal and Dow Jones
Assuming the 90 days trading horizon Ningbo Thermal Power is expected to under-perform the Dow Jones. In addition to that, Ningbo Thermal is 2.33 times more volatile than Dow Jones Industrial. It trades about -0.1 of its total potential returns per unit of risk. Dow Jones Industrial is currently generating about 0.33 per unit of volatility. If you would invest 4,239,227 in Dow Jones Industrial on November 3, 2024 and sell it today you would earn a total of 215,239 from holding Dow Jones Industrial or generate 5.08% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 90.48% |
| Values | Daily Returns |
Ningbo Thermal Power vs. Dow Jones Industrial
Performance |
| Timeline |
Ningbo Thermal and Dow Jones Volatility Contrast
Predicted Return Density |
| Returns |
Ningbo Thermal Power
Pair trading matchups for Ningbo Thermal
Dow Jones Industrial
Pair trading matchups for Dow Jones
Pair Trading with Ningbo Thermal and Dow Jones
The main advantage of trading using opposite Ningbo Thermal and Dow Jones positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Ningbo Thermal 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.| Ningbo Thermal vs. Thunder Software Technology | Ningbo Thermal vs. Wuhan Yangtze Communication | Ningbo Thermal vs. Fibocom Wireless | Ningbo Thermal vs. Jiangsu Hoperun Software |
| Dow Jones vs. Rambler Metals and | Dow Jones vs. Nicola Mining | Dow Jones vs. Old Dominion Freight | Dow Jones vs. United Guardian |
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 Holdings module to check your current holdings and cash postion to detemine if your portfolio needs rebalancing.
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