Correlation Between Hainan Mining and Dow Jones
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By analyzing existing cross correlation between Hainan Mining Co and Dow Jones Industrial, you can compare the effects of market volatilities on Hainan Mining 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 Hainan Mining with a short position of Dow Jones. Check out your portfolio center. Please also check ongoing floating volatility patterns of Hainan Mining and Dow Jones.
Diversification Opportunities for Hainan Mining and Dow Jones
0.74 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Hainan and Dow is 0.74. Overlapping area represents the amount of risk that can be diversified away by holding Hainan Mining 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 Hainan Mining 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 Hainan Mining 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 Hainan Mining i.e., Hainan Mining and Dow Jones go up and down completely randomly.
Pair Corralation between Hainan Mining and Dow Jones
Assuming the 90 days trading horizon Hainan Mining Co is expected to under-perform the Dow Jones. In addition to that, Hainan Mining is 2.15 times more volatile than Dow Jones Industrial. It trades about -0.08 of its total potential returns per unit of risk. Dow Jones Industrial is currently generating about 0.26 per unit of volatility. If you would invest 4,238,757 in Dow Jones Industrial on August 29, 2024 and sell it today you would earn a total of 247,274 from holding Dow Jones Industrial or generate 5.83% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Hainan Mining Co vs. Dow Jones Industrial
Performance |
| Timeline |
Hainan Mining and Dow Jones Volatility Contrast
Predicted Return Density |
| Returns |
Hainan Mining Co
Pair trading matchups for Hainan Mining
Dow Jones Industrial
Pair trading matchups for Dow Jones
Pair Trading with Hainan Mining and Dow Jones
The main advantage of trading using opposite Hainan Mining and Dow Jones positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Hainan Mining 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.| Hainan Mining vs. Baoshan Iron Steel | Hainan Mining vs. Shandong Gold Mining | Hainan Mining vs. Rongsheng Petrochemical Co | Hainan Mining vs. Inner Mongolia BaoTou |
| Dow Jones vs. Kaltura | Dow Jones vs. Artisan Partners Asset | Dow Jones vs. US Global Investors | Dow Jones vs. Analog Devices |
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 AI Portfolio Architect module to use AI to generate optimal portfolios and find profitable investment opportunities.
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