Correlation Between Dow Jones and Guangdong Advertising
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By analyzing existing cross correlation between Dow Jones Industrial and Guangdong Advertising Co, you can compare the effects of market volatilities on Dow Jones and Guangdong Advertising 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 Guangdong Advertising. Check out your portfolio center. Please also check ongoing floating volatility patterns of Dow Jones and Guangdong Advertising.
Diversification Opportunities for Dow Jones and Guangdong Advertising
0.79 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Dow and Guangdong is 0.79. Overlapping area represents the amount of risk that can be diversified away by holding Dow Jones Industrial and Guangdong Advertising Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Guangdong Advertising 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 Guangdong Advertising. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Guangdong Advertising has no effect on the direction of Dow Jones i.e., Dow Jones and Guangdong Advertising go up and down completely randomly.
Pair Corralation between Dow Jones and Guangdong Advertising
Assuming the 90 days trading horizon Dow Jones is expected to generate 8.39 times less return on investment than Guangdong Advertising. But when comparing it to its historical volatility, Dow Jones Industrial is 5.7 times less risky than Guangdong Advertising. It trades about 0.15 of its potential returns per unit of risk. Guangdong Advertising Co is currently generating about 0.22 of returns per unit of risk over similar time horizon. If you would invest 467.00 in Guangdong Advertising Co on August 25, 2024 and sell it today you would earn a total of 305.00 from holding Guangdong Advertising Co or generate 65.31% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 90.77% |
| Values | Daily Returns |
Dow Jones Industrial vs. Guangdong Advertising Co
Performance |
| Timeline |
Dow Jones and Guangdong Advertising Volatility Contrast
Predicted Return Density |
| Returns |
Dow Jones Industrial
Pair trading matchups for Dow Jones
Guangdong Advertising Co
Pair trading matchups for Guangdong Advertising
Pair Trading with Dow Jones and Guangdong Advertising
The main advantage of trading using opposite Dow Jones and Guangdong Advertising positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Dow Jones position performs unexpectedly, Guangdong Advertising 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 Guangdong Advertising will offset losses from the drop in Guangdong Advertising's long position.| Dow Jones vs. Vistra Energy Corp | Dow Jones vs. Fluence Energy | Dow Jones vs. Old Republic International | Dow Jones vs. Empresa Distribuidora y |
| Guangdong Advertising vs. Industrial and Commercial | Guangdong Advertising vs. Agricultural Bank of | Guangdong Advertising vs. China Construction Bank | Guangdong Advertising vs. Bank of China |
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 Idea Optimizer module to use advanced portfolio builder with pre-computed micro ideas to build optimal portfolio .
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