Correlation Between Dow Jones and Penghua Shenzhen
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By analyzing existing cross correlation between Dow Jones Industrial and Penghua Shenzhen Energy, you can compare the effects of market volatilities on Dow Jones and Penghua Shenzhen 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 Penghua Shenzhen. Check out your portfolio center. Please also check ongoing floating volatility patterns of Dow Jones and Penghua Shenzhen.
Diversification Opportunities for Dow Jones and Penghua Shenzhen
-0.56 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Dow and Penghua is -0.56. Overlapping area represents the amount of risk that can be diversified away by holding Dow Jones Industrial and Penghua Shenzhen Energy in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Penghua Shenzhen Energy 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 Penghua Shenzhen. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Penghua Shenzhen Energy has no effect on the direction of Dow Jones i.e., Dow Jones and Penghua Shenzhen go up and down completely randomly.
Pair Corralation between Dow Jones and Penghua Shenzhen
Assuming the 90 days trading horizon Dow Jones Industrial is expected to generate 0.69 times more return on investment than Penghua Shenzhen. However, Dow Jones Industrial is 1.45 times less risky than Penghua Shenzhen. It trades about 0.08 of its potential returns per unit of risk. Penghua Shenzhen Energy is currently generating about 0.0 per unit of risk. If you would invest 3,394,710 in Dow Jones Industrial on August 25, 2024 and sell it today you would earn a total of 1,034,941 from holding Dow Jones Industrial or generate 30.49% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 96.18% |
| Values | Daily Returns |
Dow Jones Industrial vs. Penghua Shenzhen Energy
Performance |
| Timeline |
Dow Jones and Penghua Shenzhen Volatility Contrast
Predicted Return Density |
| Returns |
Dow Jones Industrial
Pair trading matchups for Dow Jones
Penghua Shenzhen Energy
Pair trading matchups for Penghua Shenzhen
Pair Trading with Dow Jones and Penghua Shenzhen
The main advantage of trading using opposite Dow Jones and Penghua Shenzhen positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Dow Jones position performs unexpectedly, Penghua Shenzhen 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 Penghua Shenzhen will offset losses from the drop in Penghua Shenzhen'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 |
| Penghua Shenzhen vs. Industrial and Commercial | Penghua Shenzhen vs. Kweichow Moutai Co | Penghua Shenzhen vs. Agricultural Bank of | Penghua Shenzhen vs. China Mobile Limited |
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 Transaction History module to view history of all your transactions and understand their impact on performance.
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