Correlation Between Dow Jones and Anhui Fuhuang
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By analyzing existing cross correlation between Dow Jones Industrial and Anhui Fuhuang Steel, you can compare the effects of market volatilities on Dow Jones and Anhui Fuhuang 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 Anhui Fuhuang. Check out your portfolio center. Please also check ongoing floating volatility patterns of Dow Jones and Anhui Fuhuang.
Diversification Opportunities for Dow Jones and Anhui Fuhuang
0.72 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Dow and Anhui is 0.72. Overlapping area represents the amount of risk that can be diversified away by holding Dow Jones Industrial and Anhui Fuhuang Steel in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Anhui Fuhuang Steel 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 Anhui Fuhuang. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Anhui Fuhuang Steel has no effect on the direction of Dow Jones i.e., Dow Jones and Anhui Fuhuang go up and down completely randomly.
Pair Corralation between Dow Jones and Anhui Fuhuang
Assuming the 90 days trading horizon Dow Jones is expected to generate 7.0 times less return on investment than Anhui Fuhuang. But when comparing it to its historical volatility, Dow Jones Industrial is 5.27 times less risky than Anhui Fuhuang. It trades about 0.2 of its potential returns per unit of risk. Anhui Fuhuang Steel is currently generating about 0.26 of returns per unit of risk over similar time horizon. If you would invest 364.00 in Anhui Fuhuang Steel on September 2, 2024 and sell it today you would earn a total of 275.00 from holding Anhui Fuhuang Steel or generate 75.55% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 92.19% |
| Values | Daily Returns |
Dow Jones Industrial vs. Anhui Fuhuang Steel
Performance |
| Timeline |
Dow Jones and Anhui Fuhuang Volatility Contrast
Predicted Return Density |
| Returns |
Dow Jones Industrial
Pair trading matchups for Dow Jones
Anhui Fuhuang Steel
Pair trading matchups for Anhui Fuhuang
Pair Trading with Dow Jones and Anhui Fuhuang
The main advantage of trading using opposite Dow Jones and Anhui Fuhuang positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Dow Jones position performs unexpectedly, Anhui Fuhuang 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 Anhui Fuhuang will offset losses from the drop in Anhui Fuhuang's long position.| Dow Jones vs. Dream Finders Homes | Dow Jones vs. GEN Restaurant Group, | Dow Jones vs. National Beverage Corp | Dow Jones vs. BJs Restaurants |
| Anhui Fuhuang vs. Shandong Huifa Foodstuff | Anhui Fuhuang vs. Xiwang Foodstuffs Co | Anhui Fuhuang vs. Oriental Times Media | Anhui Fuhuang vs. Dalian Zeus Entertainment |
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 My Watchlist Analysis module to analyze my current watchlist and to refresh optimization strategy. Macroaxis watchlist is based on self-learning algorithm to remember stocks you like.
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