Correlation Between Dow Jones and Boai NKY
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By analyzing existing cross correlation between Dow Jones Industrial and Boai NKY Pharmaceuticals, you can compare the effects of market volatilities on Dow Jones and Boai NKY 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 Boai NKY. Check out your portfolio center. Please also check ongoing floating volatility patterns of Dow Jones and Boai NKY.
Diversification Opportunities for Dow Jones and Boai NKY
Poor diversification
The 3 months correlation between Dow and Boai is 0.77. Overlapping area represents the amount of risk that can be diversified away by holding Dow Jones Industrial and Boai NKY Pharmaceuticals in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Boai NKY Pharmaceuticals 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 Boai NKY. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Boai NKY Pharmaceuticals has no effect on the direction of Dow Jones i.e., Dow Jones and Boai NKY go up and down completely randomly.
Pair Corralation between Dow Jones and Boai NKY
Assuming the 90 days trading horizon Dow Jones is expected to generate 4.7 times less return on investment than Boai NKY. But when comparing it to its historical volatility, Dow Jones Industrial is 5.69 times less risky than Boai NKY. It trades about 0.37 of its potential returns per unit of risk. Boai NKY Pharmaceuticals is currently generating about 0.31 of returns per unit of risk over similar time horizon. If you would invest 1,264 in Boai NKY Pharmaceuticals on September 5, 2024 and sell it today you would earn a total of 511.00 from holding Boai NKY Pharmaceuticals or generate 40.43% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 95.65% |
| Values | Daily Returns |
Dow Jones Industrial vs. Boai NKY Pharmaceuticals
Performance |
| Timeline |
Dow Jones and Boai NKY Volatility Contrast
Predicted Return Density |
| Returns |
Dow Jones Industrial
Pair trading matchups for Dow Jones
Boai NKY Pharmaceuticals
Pair trading matchups for Boai NKY
Pair Trading with Dow Jones and Boai NKY
The main advantage of trading using opposite Dow Jones and Boai NKY positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Dow Jones position performs unexpectedly, Boai NKY 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 Boai NKY will offset losses from the drop in Boai NKY's long position.| Dow Jones vs. Shake Shack | Dow Jones vs. Artisan Partners Asset | Dow Jones vs. Dave Busters Entertainment | Dow Jones vs. Meli Hotels International |
| Boai NKY vs. Zijin Mining Group | Boai NKY vs. Wanhua Chemical Group | Boai NKY vs. Baoshan Iron Steel | Boai NKY vs. Rongsheng Petrochemical 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 Price Ceiling Movement module to calculate and plot Price Ceiling Movement for different equity instruments.
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