Correlation Between Dow Jones and Shandong
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By analyzing existing cross correlation between Dow Jones Industrial and Shandong Hi Speed RoadBridge, you can compare the effects of market volatilities on Dow Jones and Shandong 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 Shandong. Check out your portfolio center. Please also check ongoing floating volatility patterns of Dow Jones and Shandong.
Diversification Opportunities for Dow Jones and Shandong
Significant diversification
The 3 months correlation between Dow and Shandong is 0.07. Overlapping area represents the amount of risk that can be diversified away by holding Dow Jones Industrial and Shandong Hi Speed RoadBridge in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Shandong Hi Speed 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 Shandong. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Shandong Hi Speed has no effect on the direction of Dow Jones i.e., Dow Jones and Shandong go up and down completely randomly.
Pair Corralation between Dow Jones and Shandong
Assuming the 90 days trading horizon Dow Jones Industrial is expected to generate 0.71 times more return on investment than Shandong. However, Dow Jones Industrial is 1.42 times less risky than Shandong. It trades about 0.33 of its potential returns per unit of risk. Shandong Hi Speed RoadBridge is currently generating about -0.06 per unit of risk. If you would invest 4,239,227 in Dow Jones Industrial on November 3, 2024 and sell it today you would earn a total of 215,239 from holding Dow Jones Industrial or generate 5.08% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 90.48% |
| Values | Daily Returns |
Dow Jones Industrial vs. Shandong Hi Speed RoadBridge
Performance |
| Timeline |
Dow Jones and Shandong Volatility Contrast
Predicted Return Density |
| Returns |
Dow Jones Industrial
Pair trading matchups for Dow Jones
Shandong Hi Speed RoadBridge
Pair trading matchups for Shandong
Pair Trading with Dow Jones and Shandong
The main advantage of trading using opposite Dow Jones and Shandong positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Dow Jones position performs unexpectedly, Shandong 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 Shandong will offset losses from the drop in Shandong's long position.| Dow Jones vs. Rambler Metals and | Dow Jones vs. Nicola Mining | Dow Jones vs. Old Dominion Freight | Dow Jones vs. United Guardian |
| Shandong vs. Xinhua Winshare Publishing | Shandong vs. Hainan Mining Co | Shandong vs. Offcn Education Technology | Shandong vs. Zhengzhou Coal Mining |
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 Commodity Channel module to use Commodity Channel Index to analyze current equity momentum.
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