Correlation Between Shanghai Lingyun and Dow Jones
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By analyzing existing cross correlation between Shanghai Lingyun Industries and Dow Jones Industrial, you can compare the effects of market volatilities on Shanghai Lingyun 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 Lingyun with a short position of Dow Jones. Check out your portfolio center. Please also check ongoing floating volatility patterns of Shanghai Lingyun and Dow Jones.
Diversification Opportunities for Shanghai Lingyun and Dow Jones
0.7 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Shanghai and Dow is 0.7. Overlapping area represents the amount of risk that can be diversified away by holding Shanghai Lingyun Industries 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 Lingyun 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 Lingyun Industries 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 Lingyun i.e., Shanghai Lingyun and Dow Jones go up and down completely randomly.
Pair Corralation between Shanghai Lingyun and Dow Jones
Assuming the 90 days trading horizon Shanghai Lingyun Industries is expected to under-perform the Dow Jones. In addition to that, Shanghai Lingyun is 4.52 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 0.27 per unit of volatility. If you would invest 4,223,305 in Dow Jones Industrial on August 30, 2024 and sell it today you would earn a total of 248,901 from holding Dow Jones Industrial or generate 5.89% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Shanghai Lingyun Industries vs. Dow Jones Industrial
Performance |
| Timeline |
Shanghai Lingyun and Dow Jones Volatility Contrast
Predicted Return Density |
| Returns |
Shanghai Lingyun Industries
Pair trading matchups for Shanghai Lingyun
Dow Jones Industrial
Pair trading matchups for Dow Jones
Pair Trading with Shanghai Lingyun and Dow Jones
The main advantage of trading using opposite Shanghai Lingyun and Dow Jones positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Shanghai Lingyun 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 Lingyun vs. Sinosteel Engineering and | Shanghai Lingyun vs. Jiangxi JDL Environmental | Shanghai Lingyun vs. Guangdong Liantai Environmental | Shanghai Lingyun vs. Tianjin Capital Environmental |
| Dow Jones vs. Skillful Craftsman Education | Dow Jones vs. Acco Brands | Dow Jones vs. Cracker Barrel Old | Dow Jones vs. Coursera |
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 Comparator module to compare the composition, asset allocations and performance of any two portfolios in your account.
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