Correlation Between Dow Jones and Nanjing Yunhai
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By analyzing existing cross correlation between Dow Jones Industrial and Nanjing Yunhai Special, you can compare the effects of market volatilities on Dow Jones and Nanjing Yunhai 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 Nanjing Yunhai. Check out your portfolio center. Please also check ongoing floating volatility patterns of Dow Jones and Nanjing Yunhai.
Diversification Opportunities for Dow Jones and Nanjing Yunhai
0.66 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Dow and Nanjing is 0.66. Overlapping area represents the amount of risk that can be diversified away by holding Dow Jones Industrial and Nanjing Yunhai Special in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Nanjing Yunhai Special 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 Nanjing Yunhai. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Nanjing Yunhai Special has no effect on the direction of Dow Jones i.e., Dow Jones and Nanjing Yunhai go up and down completely randomly.
Pair Corralation between Dow Jones and Nanjing Yunhai
Assuming the 90 days trading horizon Dow Jones is expected to generate 32.21 times less return on investment than Nanjing Yunhai. But when comparing it to its historical volatility, Dow Jones Industrial is 7.18 times less risky than Nanjing Yunhai. It trades about 0.05 of its potential returns per unit of risk. Nanjing Yunhai Special is currently generating about 0.23 of returns per unit of risk over similar time horizon. If you would invest 1,116 in Nanjing Yunhai Special on September 13, 2024 and sell it today you would earn a total of 215.00 from holding Nanjing Yunhai Special or generate 19.27% 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. Nanjing Yunhai Special
Performance |
| Timeline |
Dow Jones and Nanjing Yunhai Volatility Contrast
Predicted Return Density |
| Returns |
Dow Jones Industrial
Pair trading matchups for Dow Jones
Nanjing Yunhai Special
Pair trading matchups for Nanjing Yunhai
Pair Trading with Dow Jones and Nanjing Yunhai
The main advantage of trading using opposite Dow Jones and Nanjing Yunhai positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Dow Jones position performs unexpectedly, Nanjing Yunhai 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 Nanjing Yunhai will offset losses from the drop in Nanjing Yunhai's long position.| Dow Jones vs. ChampionX | Dow Jones vs. Highway Holdings Limited | Dow Jones vs. Westinghouse Air Brake | Dow Jones vs. Cementos Pacasmayo SAA |
| Nanjing Yunhai vs. Ye Chiu Metal | Nanjing Yunhai vs. Qingdao Choho Industrial | Nanjing Yunhai vs. Hainan Mining Co | Nanjing Yunhai vs. Chengtun Mining Group |
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 Optimization module to compute new portfolio that will generate highest expected return given your specified tolerance for risk.
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