Correlation Between Dow Jones and Beijing Lanxum
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By analyzing existing cross correlation between Dow Jones Industrial and Beijing Lanxum Tech, you can compare the effects of market volatilities on Dow Jones and Beijing Lanxum 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 Beijing Lanxum. Check out your portfolio center. Please also check ongoing floating volatility patterns of Dow Jones and Beijing Lanxum.
Diversification Opportunities for Dow Jones and Beijing Lanxum
0.32 | Correlation Coefficient |
Weak diversification
The 3 months correlation between Dow and Beijing is 0.32. Overlapping area represents the amount of risk that can be diversified away by holding Dow Jones Industrial and Beijing Lanxum Tech in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Beijing Lanxum Tech 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 Beijing Lanxum. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Beijing Lanxum Tech has no effect on the direction of Dow Jones i.e., Dow Jones and Beijing Lanxum go up and down completely randomly.
Pair Corralation between Dow Jones and Beijing Lanxum
Assuming the 90 days trading horizon Dow Jones is expected to generate 13.61 times less return on investment than Beijing Lanxum. But when comparing it to its historical volatility, Dow Jones Industrial is 8.0 times less risky than Beijing Lanxum. It trades about 0.08 of its potential returns per unit of risk. Beijing Lanxum Tech is currently generating about 0.14 of returns per unit of risk over similar time horizon. If you would invest 173.00 in Beijing Lanxum Tech on November 3, 2024 and sell it today you would earn a total of 605.00 from holding Beijing Lanxum Tech or generate 349.71% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 94.35% |
| Values | Daily Returns |
Dow Jones Industrial vs. Beijing Lanxum Tech
Performance |
| Timeline |
Dow Jones and Beijing Lanxum Volatility Contrast
Predicted Return Density |
| Returns |
Dow Jones Industrial
Pair trading matchups for Dow Jones
Beijing Lanxum Tech
Pair trading matchups for Beijing Lanxum
Pair Trading with Dow Jones and Beijing Lanxum
The main advantage of trading using opposite Dow Jones and Beijing Lanxum positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Dow Jones position performs unexpectedly, Beijing Lanxum 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 Beijing Lanxum will offset losses from the drop in Beijing Lanxum's long position.| Dow Jones vs. Rambler Metals and | Dow Jones vs. Nicola Mining | Dow Jones vs. Old Dominion Freight | Dow Jones vs. United Guardian |
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 Pair Correlation module to compare performance and examine fundamental relationship between any two equity instruments.
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