Correlation Between Dow Jones and XJ Electric
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By analyzing existing cross correlation between Dow Jones Industrial and XJ Electric Co, you can compare the effects of market volatilities on Dow Jones and XJ Electric 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 Dow Jones with a short position of XJ Electric. Check out your portfolio center. Please also check ongoing floating volatility patterns of Dow Jones and XJ Electric.
Diversification Opportunities for Dow Jones and XJ Electric
-0.06 | Correlation Coefficient |
Good diversification
The 3 months correlation between Dow and 000400 is -0.06. Overlapping area represents the amount of risk that can be diversified away by holding Dow Jones Industrial and XJ Electric Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on XJ Electric and Dow Jones 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 Dow Jones Industrial are associated (or correlated) with XJ Electric. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of XJ Electric has no effect on the direction of Dow Jones i.e., Dow Jones and XJ Electric go up and down completely randomly.
Pair Corralation between Dow Jones and XJ Electric
Assuming the 90 days trading horizon Dow Jones Industrial is expected to generate 0.31 times more return on investment than XJ Electric. However, Dow Jones Industrial is 3.28 times less risky than XJ Electric. It trades about 0.16 of its potential returns per unit of risk. XJ Electric Co is currently generating about -0.04 per unit of risk. If you would invest 3,857,103 in Dow Jones Industrial on August 31, 2024 and sell it today you would earn a total of 633,962 from holding Dow Jones Industrial or generate 16.44% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 96.06% |
| Values | Daily Returns |
Dow Jones Industrial vs. XJ Electric Co
Performance |
| Timeline |
Dow Jones and XJ Electric Volatility Contrast
Predicted Return Density |
| Returns |
Dow Jones Industrial
Pair trading matchups for Dow Jones
XJ Electric Co
Pair trading matchups for XJ Electric
Pair Trading with Dow Jones and XJ Electric
The main advantage of trading using opposite Dow Jones and XJ Electric positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Dow Jones position performs unexpectedly, XJ Electric 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 XJ Electric will offset losses from the drop in XJ Electric's long position.| Dow Jones vs. Aerofoam Metals | Dow Jones vs. ACG Metals Limited | Dow Jones vs. China Clean Energy | Dow Jones vs. Fast Retailing Co |
| XJ Electric vs. Shaanxi Construction Machinery | XJ Electric vs. Harvest Fund Management | XJ Electric vs. Shanghai Construction Group | XJ Electric vs. Shantui Construction Machinery |
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 USA ETFs module to find actively traded Exchange Traded Funds (ETF) in USA.
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