Correlation Between Dow Jones and Sichuan Jinshi
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By analyzing existing cross correlation between Dow Jones Industrial and Sichuan Jinshi Technology, you can compare the effects of market volatilities on Dow Jones and Sichuan Jinshi 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 Sichuan Jinshi. Check out your portfolio center. Please also check ongoing floating volatility patterns of Dow Jones and Sichuan Jinshi.
Diversification Opportunities for Dow Jones and Sichuan Jinshi
0.74 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Dow and Sichuan is 0.74. Overlapping area represents the amount of risk that can be diversified away by holding Dow Jones Industrial and Sichuan Jinshi Technology in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Sichuan Jinshi Technology 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 Sichuan Jinshi. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Sichuan Jinshi Technology has no effect on the direction of Dow Jones i.e., Dow Jones and Sichuan Jinshi go up and down completely randomly.
Pair Corralation between Dow Jones and Sichuan Jinshi
Assuming the 90 days trading horizon Dow Jones Industrial is expected to generate 0.26 times more return on investment than Sichuan Jinshi. However, Dow Jones Industrial is 3.89 times less risky than Sichuan Jinshi. It trades about 0.12 of its potential returns per unit of risk. Sichuan Jinshi Technology 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. Sichuan Jinshi Technology
Performance |
| Timeline |
Dow Jones and Sichuan Jinshi Volatility Contrast
Predicted Return Density |
| Returns |
Dow Jones Industrial
Pair trading matchups for Dow Jones
Sichuan Jinshi Technology
Pair trading matchups for Sichuan Jinshi
Pair Trading with Dow Jones and Sichuan Jinshi
The main advantage of trading using opposite Dow Jones and Sichuan Jinshi positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Dow Jones position performs unexpectedly, Sichuan Jinshi 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 Sichuan Jinshi will offset losses from the drop in Sichuan Jinshi'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 |
| Sichuan Jinshi vs. Guilin Seamild Foods | Sichuan Jinshi vs. Zhengzhou Qianweiyangchu Food | Sichuan Jinshi vs. HaiXin Foods Co | Sichuan Jinshi vs. Ligao Foods CoLtd |
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 Volatility Analysis module to get historical volatility and risk analysis based on latest market data.
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