Correlation Between Dow Jones and Zhejiang Satellite
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By analyzing existing cross correlation between Dow Jones Industrial and Zhejiang Satellite Petrochemical, you can compare the effects of market volatilities on Dow Jones and Zhejiang Satellite 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 Zhejiang Satellite. Check out your portfolio center. Please also check ongoing floating volatility patterns of Dow Jones and Zhejiang Satellite.
Diversification Opportunities for Dow Jones and Zhejiang Satellite
0.52 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Dow and Zhejiang is 0.52. Overlapping area represents the amount of risk that can be diversified away by holding Dow Jones Industrial and Zhejiang Satellite Petrochemic in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Zhejiang Satellite 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 Zhejiang Satellite. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Zhejiang Satellite has no effect on the direction of Dow Jones i.e., Dow Jones and Zhejiang Satellite go up and down completely randomly.
Pair Corralation between Dow Jones and Zhejiang Satellite
Assuming the 90 days trading horizon Dow Jones Industrial is expected to generate 0.35 times more return on investment than Zhejiang Satellite. However, Dow Jones Industrial is 2.84 times less risky than Zhejiang Satellite. It trades about 0.16 of its potential returns per unit of risk. Zhejiang Satellite Petrochemical is currently generating about 0.01 per unit of risk. If you would invest 3,880,733 in Dow Jones Industrial on September 3, 2024 and sell it today you would earn a total of 610,332 from holding Dow Jones Industrial or generate 15.73% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 96.8% |
| Values | Daily Returns |
Dow Jones Industrial vs. Zhejiang Satellite Petrochemic
Performance |
| Timeline |
Dow Jones and Zhejiang Satellite Volatility Contrast
Predicted Return Density |
| Returns |
Dow Jones Industrial
Pair trading matchups for Dow Jones
Zhejiang Satellite Petrochemical
Pair trading matchups for Zhejiang Satellite
Pair Trading with Dow Jones and Zhejiang Satellite
The main advantage of trading using opposite Dow Jones and Zhejiang Satellite positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Dow Jones position performs unexpectedly, Zhejiang Satellite 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 Zhejiang Satellite will offset losses from the drop in Zhejiang Satellite's long position.| Dow Jones vs. Eastern Co | Dow Jones vs. Uber Technologies | Dow Jones vs. AKITA Drilling | Dow Jones vs. Chemours Co |
| Zhejiang Satellite vs. Zijin Mining Group | Zhejiang Satellite vs. Baoshan Iron Steel | Zhejiang Satellite vs. Hoshine Silicon Ind |
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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