Correlation Between Shanghai Ziyan and Dow Jones
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By analyzing existing cross correlation between Shanghai Ziyan Foods and Dow Jones Industrial, you can compare the effects of market volatilities on Shanghai Ziyan 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 Shanghai Ziyan with a short position of Dow Jones. Check out your portfolio center. Please also check ongoing floating volatility patterns of Shanghai Ziyan and Dow Jones.
Diversification Opportunities for Shanghai Ziyan and Dow Jones
0.78 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Shanghai and Dow is 0.78. Overlapping area represents the amount of risk that can be diversified away by holding Shanghai Ziyan Foods 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 Shanghai Ziyan 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 Shanghai Ziyan Foods 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 Shanghai Ziyan i.e., Shanghai Ziyan and Dow Jones go up and down completely randomly.
Pair Corralation between Shanghai Ziyan and Dow Jones
Assuming the 90 days trading horizon Shanghai Ziyan Foods is expected to generate 2.48 times more return on investment than Dow Jones. However, Shanghai Ziyan is 2.48 times more volatile than Dow Jones Industrial. It trades about 0.23 of its potential returns per unit of risk. Dow Jones Industrial is currently generating about 0.27 per unit of risk. If you would invest 1,696 in Shanghai Ziyan Foods on August 29, 2024 and sell it today you would earn a total of 207.00 from holding Shanghai Ziyan Foods or generate 12.21% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Shanghai Ziyan Foods vs. Dow Jones Industrial
Performance |
| Timeline |
Shanghai Ziyan and Dow Jones Volatility Contrast
Predicted Return Density |
| Returns |
Shanghai Ziyan Foods
Pair trading matchups for Shanghai Ziyan
Dow Jones Industrial
Pair trading matchups for Dow Jones
Pair Trading with Shanghai Ziyan and Dow Jones
The main advantage of trading using opposite Shanghai Ziyan and Dow Jones positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Shanghai Ziyan 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.| Shanghai Ziyan vs. Industrial and Commercial | Shanghai Ziyan vs. Agricultural Bank of | Shanghai Ziyan vs. China Construction Bank | Shanghai Ziyan vs. Bank of China |
| Dow Jones vs. CECO Environmental Corp | Dow Jones vs. Western Acquisition Ventures | Dow Jones vs. Tyson Foods | Dow Jones vs. Inflection Point Acquisition |
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 Manager module to state of the art Portfolio Manager to monitor and improve performance of your invested capital.
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