Correlation Between Dow Jones and Yuan Longping
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By analyzing existing cross correlation between Dow Jones Industrial and Yuan Longping High tech, you can compare the effects of market volatilities on Dow Jones and Yuan Longping 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 Yuan Longping. Check out your portfolio center. Please also check ongoing floating volatility patterns of Dow Jones and Yuan Longping.
Diversification Opportunities for Dow Jones and Yuan Longping
0.7 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Dow and Yuan is 0.7. Overlapping area represents the amount of risk that can be diversified away by holding Dow Jones Industrial and Yuan Longping High tech in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Yuan Longping High 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 Yuan Longping. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Yuan Longping High has no effect on the direction of Dow Jones i.e., Dow Jones and Yuan Longping go up and down completely randomly.
Pair Corralation between Dow Jones and Yuan Longping
Assuming the 90 days trading horizon Dow Jones Industrial is expected to generate 0.34 times more return on investment than Yuan Longping. However, Dow Jones Industrial is 2.97 times less risky than Yuan Longping. It trades about 0.15 of its potential returns per unit of risk. Yuan Longping High tech is currently generating about 0.0 per unit of risk. If you would invest 3,868,632 in Dow Jones Industrial on August 29, 2024 and sell it today you would earn a total of 603,574 from holding Dow Jones Industrial or generate 15.6% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 96.03% |
| Values | Daily Returns |
Dow Jones Industrial vs. Yuan Longping High tech
Performance |
| Timeline |
Dow Jones and Yuan Longping Volatility Contrast
Predicted Return Density |
| Returns |
Dow Jones Industrial
Pair trading matchups for Dow Jones
Yuan Longping High tech
Pair trading matchups for Yuan Longping
Pair Trading with Dow Jones and Yuan Longping
The main advantage of trading using opposite Dow Jones and Yuan Longping positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Dow Jones position performs unexpectedly, Yuan Longping 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 Yuan Longping will offset losses from the drop in Yuan Longping's long position.| Dow Jones vs. Kaltura | Dow Jones vs. Artisan Partners Asset | Dow Jones vs. US Global Investors | Dow Jones vs. Analog Devices |
| Yuan Longping vs. PetroChina Co Ltd | Yuan Longping vs. China Mobile Limited | Yuan Longping vs. Ping An Insurance | Yuan Longping vs. China Petroleum Chemical |
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 Alpha Finder module to use alpha and beta coefficients to find investment opportunities after accounting for the risk.
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