Correlation Between Dow Jones and Shenzhen Zhongzhuang
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By analyzing existing cross correlation between Dow Jones Industrial and Shenzhen Zhongzhuang Construction, you can compare the effects of market volatilities on Dow Jones and Shenzhen Zhongzhuang 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 Shenzhen Zhongzhuang. Check out your portfolio center. Please also check ongoing floating volatility patterns of Dow Jones and Shenzhen Zhongzhuang.
Diversification Opportunities for Dow Jones and Shenzhen Zhongzhuang
0.79 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Dow and Shenzhen is 0.79. Overlapping area represents the amount of risk that can be diversified away by holding Dow Jones Industrial and Shenzhen Zhongzhuang Construct in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Shenzhen Zhongzhuang 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 Shenzhen Zhongzhuang. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Shenzhen Zhongzhuang has no effect on the direction of Dow Jones i.e., Dow Jones and Shenzhen Zhongzhuang go up and down completely randomly.
Pair Corralation between Dow Jones and Shenzhen Zhongzhuang
Assuming the 90 days trading horizon Dow Jones Industrial is expected to generate 0.19 times more return on investment than Shenzhen Zhongzhuang. However, Dow Jones Industrial is 5.14 times less risky than Shenzhen Zhongzhuang. It trades about 0.12 of its potential returns per unit of risk. Shenzhen Zhongzhuang Construction is currently generating about 0.01 per unit of risk. If you would invest 3,383,361 in Dow Jones Industrial on August 31, 2024 and sell it today you would earn a total of 1,107,704 from holding Dow Jones Industrial or generate 32.74% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 95.99% |
| Values | Daily Returns |
Dow Jones Industrial vs. Shenzhen Zhongzhuang Construct
Performance |
| Timeline |
Dow Jones and Shenzhen Zhongzhuang Volatility Contrast
Predicted Return Density |
| Returns |
Dow Jones Industrial
Pair trading matchups for Dow Jones
Shenzhen Zhongzhuang Construction
Pair trading matchups for Shenzhen Zhongzhuang
Pair Trading with Dow Jones and Shenzhen Zhongzhuang
The main advantage of trading using opposite Dow Jones and Shenzhen Zhongzhuang positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Dow Jones position performs unexpectedly, Shenzhen Zhongzhuang 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 Shenzhen Zhongzhuang will offset losses from the drop in Shenzhen Zhongzhuang's long position.| Dow Jones vs. Aerofoam Metals | Dow Jones vs. ACG Metals Limited | Dow Jones vs. China Clean Energy | Dow Jones vs. Fast Retailing Co |
| Shenzhen Zhongzhuang vs. Cultural Investment Holdings | Shenzhen Zhongzhuang vs. Gome Telecom Equipment | Shenzhen Zhongzhuang vs. Bus Online Co | Shenzhen Zhongzhuang vs. Holitech Technology Co |
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 ETF Categories module to list of ETF categories grouped based on various criteria, such as the investment strategy or type of investments.
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