Correlation Between China Oil and Dow Jones
Can any of the company-specific risk be diversified away by investing in both China Oil and Dow Jones at the same time? Although using a correlation coefficient on its own may not help to predict future stock returns, this module helps to understand the diversifiable risk of combining China Oil and Dow Jones into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between China Oil And and Dow Jones Industrial, you can compare the effects of market volatilities on China Oil 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 China Oil with a short position of Dow Jones. Check out your portfolio center. Please also check ongoing floating volatility patterns of China Oil and Dow Jones.
Diversification Opportunities for China Oil and Dow Jones
Very good diversification
The 3 months correlation between China and Dow is -0.25. Overlapping area represents the amount of risk that can be diversified away by holding China Oil And 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 China Oil 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 China Oil And 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 China Oil i.e., China Oil and Dow Jones go up and down completely randomly.
Pair Corralation between China Oil and Dow Jones
If you would invest 4,214,154 in Dow Jones Industrial on August 31, 2024 and sell it today you would earn a total of 258,052 from holding Dow Jones Industrial or generate 6.12% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
China Oil And vs. Dow Jones Industrial
Performance |
| Timeline |
China Oil and Dow Jones Volatility Contrast
Predicted Return Density |
| Returns |
China Oil And
Pair trading matchups for China Oil
Dow Jones Industrial
Pair trading matchups for Dow Jones
Pair Trading with China Oil and Dow Jones
The main advantage of trading using opposite China Oil and Dow Jones positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if China Oil 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.| China Oil vs. CVR Energy | China Oil vs. Valero Energy | China Oil vs. Phillips 66 | China Oil vs. Marathon Petroleum Corp |
| Dow Jones vs. Aerofoam Metals | Dow Jones vs. ACG Metals Limited | Dow Jones vs. China Clean Energy | Dow Jones vs. Fast Retailing Co |
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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