Correlation Between Dow Jones and Dongnan Electronics
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By analyzing existing cross correlation between Dow Jones Industrial and Dongnan Electronics Co, you can compare the effects of market volatilities on Dow Jones and Dongnan Electronics 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 Dongnan Electronics. Check out your portfolio center. Please also check ongoing floating volatility patterns of Dow Jones and Dongnan Electronics.
Diversification Opportunities for Dow Jones and Dongnan Electronics
0.75 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Dow and Dongnan is 0.75. Overlapping area represents the amount of risk that can be diversified away by holding Dow Jones Industrial and Dongnan Electronics Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Dongnan Electronics 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 Dongnan Electronics. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Dongnan Electronics has no effect on the direction of Dow Jones i.e., Dow Jones and Dongnan Electronics go up and down completely randomly.
Pair Corralation between Dow Jones and Dongnan Electronics
Assuming the 90 days trading horizon Dow Jones is expected to generate 1.06 times less return on investment than Dongnan Electronics. But when comparing it to its historical volatility, Dow Jones Industrial is 5.78 times less risky than Dongnan Electronics. It trades about 0.37 of its potential returns per unit of risk. Dongnan Electronics Co is currently generating about 0.07 of returns per unit of risk over similar time horizon. If you would invest 2,344 in Dongnan Electronics Co on September 1, 2024 and sell it today you would earn a total of 126.00 from holding Dongnan Electronics Co or generate 5.38% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 95.45% |
| Values | Daily Returns |
Dow Jones Industrial vs. Dongnan Electronics Co
Performance |
| Timeline |
Dow Jones and Dongnan Electronics Volatility Contrast
Predicted Return Density |
| Returns |
Dow Jones Industrial
Pair trading matchups for Dow Jones
Dongnan Electronics Co
Pair trading matchups for Dongnan Electronics
Pair Trading with Dow Jones and Dongnan Electronics
The main advantage of trading using opposite Dow Jones and Dongnan Electronics positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Dow Jones position performs unexpectedly, Dongnan Electronics 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 Dongnan Electronics will offset losses from the drop in Dongnan Electronics' long position.| Dow Jones vs. Catalyst Pharmaceuticals | Dow Jones vs. Sphere Entertainment Co | Dow Jones vs. National CineMedia | Dow Jones vs. Mink Therapeutics |
| Dongnan Electronics vs. Cultural Investment Holdings | Dongnan Electronics vs. Gome Telecom Equipment | Dongnan Electronics vs. Bus Online Co | Dongnan Electronics vs. Holitech Technology 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 Portfolio File Import module to quickly import all of your third-party portfolios from your local drive in csv format.
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