Correlation Between Dow Jones and Shenzhen Mindray
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By analyzing existing cross correlation between Dow Jones Industrial and Shenzhen Mindray Bio Medical, you can compare the effects of market volatilities on Dow Jones and Shenzhen Mindray 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 Shenzhen Mindray. Check out your portfolio center. Please also check ongoing floating volatility patterns of Dow Jones and Shenzhen Mindray.
Diversification Opportunities for Dow Jones and Shenzhen Mindray
0.6 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Dow and Shenzhen is 0.6. Overlapping area represents the amount of risk that can be diversified away by holding Dow Jones Industrial and Shenzhen Mindray Bio Medical in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Shenzhen Mindray Bio 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 Shenzhen Mindray. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Shenzhen Mindray Bio has no effect on the direction of Dow Jones i.e., Dow Jones and Shenzhen Mindray go up and down completely randomly.
Pair Corralation between Dow Jones and Shenzhen Mindray
Assuming the 90 days trading horizon Dow Jones Industrial is expected to generate 0.53 times more return on investment than Shenzhen Mindray. However, Dow Jones Industrial is 1.87 times less risky than Shenzhen Mindray. It trades about 0.26 of its potential returns per unit of risk. Shenzhen Mindray Bio Medical is currently generating about -0.14 per unit of risk. If you would invest 4,238,757 in Dow Jones Industrial on August 27, 2024 and sell it today you would earn a total of 234,900 from holding Dow Jones Industrial or generate 5.54% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Dow Jones Industrial vs. Shenzhen Mindray Bio Medical
Performance |
| Timeline |
Dow Jones and Shenzhen Mindray Volatility Contrast
Predicted Return Density |
| Returns |
Dow Jones Industrial
Pair trading matchups for Dow Jones
Shenzhen Mindray Bio Medical
Pair trading matchups for Shenzhen Mindray
Pair Trading with Dow Jones and Shenzhen Mindray
The main advantage of trading using opposite Dow Jones and Shenzhen Mindray positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Dow Jones position performs unexpectedly, Shenzhen Mindray 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 Shenzhen Mindray will offset losses from the drop in Shenzhen Mindray's long position.| Dow Jones vs. Meiwu Technology Co | Dow Jones vs. 17 Education Technology | Dow Jones vs. 51Talk Online Education | Dow Jones vs. Afya |
| Shenzhen Mindray vs. Cultural Investment Holdings | Shenzhen Mindray vs. Jointo Energy Investment | Shenzhen Mindray vs. Chengdu B ray Media | Shenzhen Mindray vs. Luyin Investment Group |
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 Portfolio Backtesting module to avoid under-diversification and over-optimization by backtesting your portfolios.
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