Correlation Between Shaanxi Beiyuan and Dow Jones
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By analyzing existing cross correlation between Shaanxi Beiyuan Chemical and Dow Jones Industrial, you can compare the effects of market volatilities on Shaanxi Beiyuan 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 Shaanxi Beiyuan with a short position of Dow Jones. Check out your portfolio center. Please also check ongoing floating volatility patterns of Shaanxi Beiyuan and Dow Jones.
Diversification Opportunities for Shaanxi Beiyuan and Dow Jones
0.2 | Correlation Coefficient |
Modest diversification
The 3 months correlation between Shaanxi and Dow is 0.2. Overlapping area represents the amount of risk that can be diversified away by holding Shaanxi Beiyuan 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 Shaanxi Beiyuan 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 Shaanxi Beiyuan 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 Shaanxi Beiyuan i.e., Shaanxi Beiyuan and Dow Jones go up and down completely randomly.
Pair Corralation between Shaanxi Beiyuan and Dow Jones
Assuming the 90 days trading horizon Shaanxi Beiyuan is expected to generate 2.48 times less return on investment than Dow Jones. In addition to that, Shaanxi Beiyuan is 2.05 times more volatile than Dow Jones Industrial. It trades about 0.03 of its total potential returns per unit of risk. Dow Jones Industrial is currently generating about 0.15 per unit of volatility. If you would invest 3,870,327 in Dow Jones Industrial on November 3, 2024 and sell it today you would earn a total of 584,139 from holding Dow Jones Industrial or generate 15.09% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 95.2% |
| Values | Daily Returns |
Shaanxi Beiyuan Chemical vs. Dow Jones Industrial
Performance |
| Timeline |
Shaanxi Beiyuan and Dow Jones Volatility Contrast
Predicted Return Density |
| Returns |
Shaanxi Beiyuan Chemical
Pair trading matchups for Shaanxi Beiyuan
Dow Jones Industrial
Pair trading matchups for Dow Jones
Pair Trading with Shaanxi Beiyuan and Dow Jones
The main advantage of trading using opposite Shaanxi Beiyuan and Dow Jones positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Shaanxi Beiyuan 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.| Shaanxi Beiyuan vs. Chongqing Changan Automobile | Shaanxi Beiyuan vs. Kangping Technology Co | Shaanxi Beiyuan vs. Sinofibers Technology Co | Shaanxi Beiyuan vs. Ningbo Fangzheng Automobile |
| Dow Jones vs. Cincinnati Financial | Dow Jones vs. Kellanova | Dow Jones vs. Acme United | Dow Jones vs. Procter Gamble |
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 Investing Opportunities module to build portfolios using our predefined set of ideas and optimize them against your investing preferences.
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