Correlation Between Dow Jones and China Resources
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By analyzing existing cross correlation between Dow Jones Industrial and China Resources Boya, you can compare the effects of market volatilities on Dow Jones and China Resources 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 China Resources. Check out your portfolio center. Please also check ongoing floating volatility patterns of Dow Jones and China Resources.
Diversification Opportunities for Dow Jones and China Resources
-0.06 | Correlation Coefficient |
Good diversification
The 3 months correlation between Dow and China is -0.06. Overlapping area represents the amount of risk that can be diversified away by holding Dow Jones Industrial and China Resources Boya in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on China Resources Boya 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 China Resources. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of China Resources Boya has no effect on the direction of Dow Jones i.e., Dow Jones and China Resources go up and down completely randomly.
Pair Corralation between Dow Jones and China Resources
Assuming the 90 days trading horizon Dow Jones is expected to generate 1.72 times less return on investment than China Resources. But when comparing it to its historical volatility, Dow Jones Industrial is 3.55 times less risky than China Resources. It trades about 0.1 of its potential returns per unit of risk. China Resources Boya is currently generating about 0.05 of returns per unit of risk over similar time horizon. If you would invest 2,560 in China Resources Boya on August 29, 2024 and sell it today you would earn a total of 536.00 from holding China Resources Boya or generate 20.94% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 93.78% |
| Values | Daily Returns |
Dow Jones Industrial vs. China Resources Boya
Performance |
| Timeline |
Dow Jones and China Resources Volatility Contrast
Predicted Return Density |
| Returns |
Dow Jones Industrial
Pair trading matchups for Dow Jones
China Resources Boya
Pair trading matchups for China Resources
Pair Trading with Dow Jones and China Resources
The main advantage of trading using opposite Dow Jones and China Resources positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Dow Jones position performs unexpectedly, China Resources 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 China Resources will offset losses from the drop in China Resources' long position.| Dow Jones vs. Kaltura | Dow Jones vs. Artisan Partners Asset | Dow Jones vs. US Global Investors | Dow Jones vs. Analog Devices |
| China Resources vs. Hainan Haiqi Transportation | China Resources vs. Metro Investment Development | China Resources vs. Sichuan Fulin Transportation | China Resources vs. Jiangsu Jinling Sports |
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 Positions Ratings module to determine portfolio positions ratings based on digital equity recommendations. Macroaxis instant position ratings are based on combination of fundamental analysis and risk-adjusted market performance.
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