Correlation Between Dow Jones and China Minsheng
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By analyzing existing cross correlation between Dow Jones Industrial and China Minsheng Banking, you can compare the effects of market volatilities on Dow Jones and China Minsheng 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 Minsheng. Check out your portfolio center. Please also check ongoing floating volatility patterns of Dow Jones and China Minsheng.
Diversification Opportunities for Dow Jones and China Minsheng
0.68 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Dow and China is 0.68. Overlapping area represents the amount of risk that can be diversified away by holding Dow Jones Industrial and China Minsheng Banking in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on China Minsheng Banking 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 Minsheng. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of China Minsheng Banking has no effect on the direction of Dow Jones i.e., Dow Jones and China Minsheng go up and down completely randomly.
Pair Corralation between Dow Jones and China Minsheng
Assuming the 90 days trading horizon Dow Jones Industrial is expected to generate 0.45 times more return on investment than China Minsheng. However, Dow Jones Industrial is 2.24 times less risky than China Minsheng. It trades about 0.16 of its potential returns per unit of risk. China Minsheng Banking is currently generating about 0.02 per unit of risk. If you would invest 3,857,103 in Dow Jones Industrial on September 1, 2024 and sell it today you would earn a total of 633,962 from holding Dow Jones Industrial or generate 16.44% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 97.62% |
| Values | Daily Returns |
Dow Jones Industrial vs. China Minsheng Banking
Performance |
| Timeline |
Dow Jones and China Minsheng Volatility Contrast
Predicted Return Density |
| Returns |
Dow Jones Industrial
Pair trading matchups for Dow Jones
China Minsheng Banking
Pair trading matchups for China Minsheng
Pair Trading with Dow Jones and China Minsheng
The main advantage of trading using opposite Dow Jones and China Minsheng positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Dow Jones position performs unexpectedly, China Minsheng 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 Minsheng will offset losses from the drop in China Minsheng's long position.| Dow Jones vs. Catalyst Pharmaceuticals | Dow Jones vs. Sphere Entertainment Co | Dow Jones vs. National CineMedia | Dow Jones vs. Mink Therapeutics |
| China Minsheng vs. V V Food | China Minsheng vs. Juewei Food Co | China Minsheng vs. 360 Security Technology | China Minsheng vs. Guangdong Xiongsu Technology |
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 Diagnostics module to use generated alerts and portfolio events aggregator to diagnose current holdings.
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