Correlation Between Dow Jones and Nanning Chemical
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By analyzing existing cross correlation between Dow Jones Industrial and Nanning Chemical Industry, you can compare the effects of market volatilities on Dow Jones and Nanning Chemical 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 Nanning Chemical. Check out your portfolio center. Please also check ongoing floating volatility patterns of Dow Jones and Nanning Chemical.
Diversification Opportunities for Dow Jones and Nanning Chemical
0.17 | Correlation Coefficient |
Average diversification
The 3 months correlation between Dow and Nanning is 0.17. Overlapping area represents the amount of risk that can be diversified away by holding Dow Jones Industrial and Nanning Chemical Industry in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Nanning Chemical Industry 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 Nanning Chemical. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Nanning Chemical Industry has no effect on the direction of Dow Jones i.e., Dow Jones and Nanning Chemical go up and down completely randomly.
Pair Corralation between Dow Jones and Nanning Chemical
Assuming the 90 days trading horizon Dow Jones Industrial is expected to generate 0.24 times more return on investment than Nanning Chemical. However, Dow Jones Industrial is 4.25 times less risky than Nanning Chemical. It trades about 0.08 of its potential returns per unit of risk. Nanning Chemical Industry is currently generating about 0.02 per unit of risk. If you would invest 3,389,102 in Dow Jones Industrial on October 27, 2024 and sell it today you would earn a total of 1,053,323 from holding Dow Jones Industrial or generate 31.08% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 97.37% |
| Values | Daily Returns |
Dow Jones Industrial vs. Nanning Chemical Industry
Performance |
| Timeline |
Dow Jones and Nanning Chemical Volatility Contrast
Predicted Return Density |
| Returns |
Dow Jones Industrial
Pair trading matchups for Dow Jones
Nanning Chemical Industry
Pair trading matchups for Nanning Chemical
Pair Trading with Dow Jones and Nanning Chemical
The main advantage of trading using opposite Dow Jones and Nanning Chemical positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Dow Jones position performs unexpectedly, Nanning Chemical 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 Nanning Chemical will offset losses from the drop in Nanning Chemical's long position.| Dow Jones vs. Westrock Coffee | Dow Jones vs. Lipocine | Dow Jones vs. Regeneron Pharmaceuticals | Dow Jones vs. Summit Therapeutics PLC |
| Nanning Chemical vs. China Publishing Media | Nanning Chemical vs. Heilongjiang Publishing Media | Nanning Chemical vs. MayAir Technology Co | Nanning Chemical vs. Thinkingdom Media 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 Investing Opportunities module to build portfolios using our predefined set of ideas and optimize them against your investing preferences.
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