Correlation Between Dow Jones and Hubei Xingfa
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By analyzing existing cross correlation between Dow Jones Industrial and Hubei Xingfa Chemicals, you can compare the effects of market volatilities on Dow Jones and Hubei Xingfa 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 Hubei Xingfa. Check out your portfolio center. Please also check ongoing floating volatility patterns of Dow Jones and Hubei Xingfa.
Diversification Opportunities for Dow Jones and Hubei Xingfa
0.28 | Correlation Coefficient |
Modest diversification
The 3 months correlation between Dow and Hubei is 0.28. Overlapping area represents the amount of risk that can be diversified away by holding Dow Jones Industrial and Hubei Xingfa Chemicals in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Hubei Xingfa Chemicals 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 Hubei Xingfa. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Hubei Xingfa Chemicals has no effect on the direction of Dow Jones i.e., Dow Jones and Hubei Xingfa go up and down completely randomly.
Pair Corralation between Dow Jones and Hubei Xingfa
Assuming the 90 days trading horizon Dow Jones is expected to generate 2.14 times less return on investment than Hubei Xingfa. But when comparing it to its historical volatility, Dow Jones Industrial is 3.16 times less risky than Hubei Xingfa. It trades about 0.08 of its potential returns per unit of risk. Hubei Xingfa Chemicals is currently generating about 0.05 of returns per unit of risk over similar time horizon. If you would invest 1,738 in Hubei Xingfa Chemicals on October 20, 2024 and sell it today you would earn a total of 465.00 from holding Hubei Xingfa Chemicals or generate 26.75% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 95.58% |
| Values | Daily Returns |
Dow Jones Industrial vs. Hubei Xingfa Chemicals
Performance |
| Timeline |
Dow Jones and Hubei Xingfa Volatility Contrast
Predicted Return Density |
| Returns |
Dow Jones Industrial
Pair trading matchups for Dow Jones
Hubei Xingfa Chemicals
Pair trading matchups for Hubei Xingfa
Pair Trading with Dow Jones and Hubei Xingfa
The main advantage of trading using opposite Dow Jones and Hubei Xingfa positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Dow Jones position performs unexpectedly, Hubei Xingfa 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 Hubei Xingfa will offset losses from the drop in Hubei Xingfa's long position.| Dow Jones vs. Aluminum of | Dow Jones vs. Adtalem Global Education | Dow Jones vs. East Africa Metals | Dow Jones vs. Western Copper and |
| Hubei Xingfa vs. Luolai Home Textile | Hubei Xingfa vs. Nanjing OLO Home | Hubei Xingfa vs. Anhui Huaren Health | Hubei Xingfa vs. CSSC Offshore Marine |
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 Stock Tickers module to use high-impact, comprehensive, and customizable stock tickers that can be easily integrated to any websites.
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