Correlation Between Bank of Changsha and Dow Jones
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By analyzing existing cross correlation between Bank of Changsha and Dow Jones Industrial, you can compare the effects of market volatilities on Bank of Changsha 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 Bank of Changsha with a short position of Dow Jones. Check out your portfolio center. Please also check ongoing floating volatility patterns of Bank of Changsha and Dow Jones.
Diversification Opportunities for Bank of Changsha and Dow Jones
0.6 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Bank and Dow is 0.6. Overlapping area represents the amount of risk that can be diversified away by holding Bank of Changsha 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 Bank of Changsha 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 Bank of Changsha 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 Bank of Changsha i.e., Bank of Changsha and Dow Jones go up and down completely randomly.
Pair Corralation between Bank of Changsha and Dow Jones
Assuming the 90 days trading horizon Bank of Changsha is expected to generate 2.16 times more return on investment than Dow Jones. However, Bank of Changsha is 2.16 times more volatile than Dow Jones Industrial. It trades about 0.05 of its potential returns per unit of risk. Dow Jones Industrial is currently generating about 0.09 per unit of risk. If you would invest 646.00 in Bank of Changsha on September 5, 2024 and sell it today you would earn a total of 221.00 from holding Bank of Changsha or generate 34.21% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 96.36% |
| Values | Daily Returns |
Bank of Changsha vs. Dow Jones Industrial
Performance |
| Timeline |
Bank of Changsha and Dow Jones Volatility Contrast
Predicted Return Density |
| Returns |
Bank of Changsha
Pair trading matchups for Bank of Changsha
Dow Jones Industrial
Pair trading matchups for Dow Jones
Pair Trading with Bank of Changsha and Dow Jones
The main advantage of trading using opposite Bank of Changsha and Dow Jones positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Bank of Changsha 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.| Bank of Changsha vs. Shanghai Rendu Biotechnology | Bank of Changsha vs. Shenzhen Clou Electronics | Bank of Changsha vs. Leyard Optoelectronic | Bank of Changsha vs. Fuzhou Rockchip Electronics |
| 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 Share Portfolio module to track or share privately all of your investments from the convenience of any device.
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