Correlation Between Dow Jones and Bengang Steel
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By analyzing existing cross correlation between Dow Jones Industrial and Bengang Steel Plates, you can compare the effects of market volatilities on Dow Jones and Bengang Steel 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 Bengang Steel. Check out your portfolio center. Please also check ongoing floating volatility patterns of Dow Jones and Bengang Steel.
Diversification Opportunities for Dow Jones and Bengang Steel
0.65 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Dow and Bengang is 0.65. Overlapping area represents the amount of risk that can be diversified away by holding Dow Jones Industrial and Bengang Steel Plates in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Bengang Steel Plates 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 Bengang Steel. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Bengang Steel Plates has no effect on the direction of Dow Jones i.e., Dow Jones and Bengang Steel go up and down completely randomly.
Pair Corralation between Dow Jones and Bengang Steel
Assuming the 90 days trading horizon Dow Jones Industrial is expected to generate 0.49 times more return on investment than Bengang Steel. However, Dow Jones Industrial is 2.05 times less risky than Bengang Steel. It trades about 0.37 of its potential returns per unit of risk. Bengang Steel Plates is currently generating about -0.18 per unit of risk. If you would invest 4,176,346 in Dow Jones Industrial on September 1, 2024 and sell it today you would earn a total of 314,719 from holding Dow Jones Industrial or generate 7.54% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 95.45% |
| Values | Daily Returns |
Dow Jones Industrial vs. Bengang Steel Plates
Performance |
| Timeline |
Dow Jones and Bengang Steel Volatility Contrast
Predicted Return Density |
| Returns |
Dow Jones Industrial
Pair trading matchups for Dow Jones
Bengang Steel Plates
Pair trading matchups for Bengang Steel
Pair Trading with Dow Jones and Bengang Steel
The main advantage of trading using opposite Dow Jones and Bengang Steel positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Dow Jones position performs unexpectedly, Bengang Steel 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 Bengang Steel will offset losses from the drop in Bengang Steel's long position.| Dow Jones vs. Catalyst Pharmaceuticals | Dow Jones vs. Sphere Entertainment Co | Dow Jones vs. National CineMedia | Dow Jones vs. Mink Therapeutics |
| Bengang Steel vs. Gome Telecom Equipment | Bengang Steel vs. Shenzhen Kexin Communication | Bengang Steel vs. Wuhan Yangtze Communication | Bengang Steel vs. Sportsoul Co Ltd |
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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