Correlation Between Dow Jones and Xinke Material
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By analyzing existing cross correlation between Dow Jones Industrial and Xinke Material, you can compare the effects of market volatilities on Dow Jones and Xinke Material 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 Xinke Material. Check out your portfolio center. Please also check ongoing floating volatility patterns of Dow Jones and Xinke Material.
Diversification Opportunities for Dow Jones and Xinke Material
0.74 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Dow and Xinke is 0.74. Overlapping area represents the amount of risk that can be diversified away by holding Dow Jones Industrial and Xinke Material in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Xinke Material 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 Xinke Material. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Xinke Material has no effect on the direction of Dow Jones i.e., Dow Jones and Xinke Material go up and down completely randomly.
Pair Corralation between Dow Jones and Xinke Material
Assuming the 90 days trading horizon Dow Jones Industrial is expected to generate 0.41 times more return on investment than Xinke Material. However, Dow Jones Industrial is 2.43 times less risky than Xinke Material. It trades about 0.37 of its potential returns per unit of risk. Xinke Material is currently generating about 0.06 per unit of risk. If you would invest 4,176,346 in Dow Jones Industrial on September 1, 2024 and sell it today you would earn a total of 314,719 from holding Dow Jones Industrial or generate 7.54% 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. Xinke Material
Performance |
| Timeline |
Dow Jones and Xinke Material Volatility Contrast
Predicted Return Density |
| Returns |
Dow Jones Industrial
Pair trading matchups for Dow Jones
Xinke Material
Pair trading matchups for Xinke Material
Pair Trading with Dow Jones and Xinke Material
The main advantage of trading using opposite Dow Jones and Xinke Material positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Dow Jones position performs unexpectedly, Xinke Material 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 Xinke Material will offset losses from the drop in Xinke Material's long position.| Dow Jones vs. Catalyst Pharmaceuticals | Dow Jones vs. Sphere Entertainment Co | Dow Jones vs. National CineMedia | Dow Jones vs. Mink Therapeutics |
| Xinke Material vs. Gome Telecom Equipment | Xinke Material vs. Eastern Communications Co | Xinke Material vs. Tongyu Communication | Xinke Material vs. Everdisplay Optronics Shanghai |
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 Equity Analysis module to research over 250,000 global equities including funds, stocks and ETFs to find investment opportunities.
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