Correlation Between Liaoning Dingjide and Dow Jones
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By analyzing existing cross correlation between Liaoning Dingjide Petrochemical and Dow Jones Industrial, you can compare the effects of market volatilities on Liaoning Dingjide 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 Liaoning Dingjide with a short position of Dow Jones. Check out your portfolio center. Please also check ongoing floating volatility patterns of Liaoning Dingjide and Dow Jones.
Diversification Opportunities for Liaoning Dingjide and Dow Jones
0.7 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Liaoning and Dow is 0.7. Overlapping area represents the amount of risk that can be diversified away by holding Liaoning Dingjide Petrochemica 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 Liaoning Dingjide 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 Liaoning Dingjide Petrochemical 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 Liaoning Dingjide i.e., Liaoning Dingjide and Dow Jones go up and down completely randomly.
Pair Corralation between Liaoning Dingjide and Dow Jones
Assuming the 90 days trading horizon Liaoning Dingjide Petrochemical is expected to under-perform the Dow Jones. In addition to that, Liaoning Dingjide is 3.49 times more volatile than Dow Jones Industrial. It trades about -0.01 of its total potential returns per unit of risk. Dow Jones Industrial is currently generating about 0.14 per unit of volatility. If you would invest 3,885,286 in Dow Jones Industrial on August 25, 2024 and sell it today you would earn a total of 544,365 from holding Dow Jones Industrial or generate 14.01% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 96.85% |
| Values | Daily Returns |
Liaoning Dingjide Petrochemica vs. Dow Jones Industrial
Performance |
| Timeline |
Liaoning Dingjide and Dow Jones Volatility Contrast
Predicted Return Density |
| Returns |
Liaoning Dingjide Petrochemical
Pair trading matchups for Liaoning Dingjide
Dow Jones Industrial
Pair trading matchups for Dow Jones
Pair Trading with Liaoning Dingjide and Dow Jones
The main advantage of trading using opposite Liaoning Dingjide and Dow Jones positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Liaoning Dingjide 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.| Liaoning Dingjide vs. Zijin Mining Group | Liaoning Dingjide vs. Wanhua Chemical Group | Liaoning Dingjide vs. Baoshan Iron Steel | Liaoning Dingjide vs. Shandong Gold Mining |
| Dow Jones vs. Vistra Energy Corp | Dow Jones vs. Fluence Energy | Dow Jones vs. Old Republic International | Dow Jones vs. Empresa Distribuidora y |
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 Anywhere module to track or share privately all of your investments from the convenience of any device.
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