Correlation Between Dow Jones and Guangxi Wuzhou
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By analyzing existing cross correlation between Dow Jones Industrial and Guangxi Wuzhou Communications, you can compare the effects of market volatilities on Dow Jones and Guangxi Wuzhou 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 Guangxi Wuzhou. Check out your portfolio center. Please also check ongoing floating volatility patterns of Dow Jones and Guangxi Wuzhou.
Diversification Opportunities for Dow Jones and Guangxi Wuzhou
0.67 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Dow and Guangxi is 0.67. Overlapping area represents the amount of risk that can be diversified away by holding Dow Jones Industrial and Guangxi Wuzhou Communications in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Guangxi Wuzhou Commu 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 Guangxi Wuzhou. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Guangxi Wuzhou Commu has no effect on the direction of Dow Jones i.e., Dow Jones and Guangxi Wuzhou go up and down completely randomly.
Pair Corralation between Dow Jones and Guangxi Wuzhou
Assuming the 90 days trading horizon Dow Jones Industrial is expected to generate 0.28 times more return on investment than Guangxi Wuzhou. However, Dow Jones Industrial is 3.62 times less risky than Guangxi Wuzhou. It trades about 0.12 of its potential returns per unit of risk. Guangxi Wuzhou Communications is currently generating about 0.01 per unit of risk. If you would invest 3,640,493 in Dow Jones Industrial on September 4, 2024 and sell it today you would earn a total of 837,707 from holding Dow Jones Industrial or generate 23.01% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 96.34% |
| Values | Daily Returns |
Dow Jones Industrial vs. Guangxi Wuzhou Communications
Performance |
| Timeline |
Dow Jones and Guangxi Wuzhou Volatility Contrast
Predicted Return Density |
| Returns |
Dow Jones Industrial
Pair trading matchups for Dow Jones
Guangxi Wuzhou Communications
Pair trading matchups for Guangxi Wuzhou
Pair Trading with Dow Jones and Guangxi Wuzhou
The main advantage of trading using opposite Dow Jones and Guangxi Wuzhou positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Dow Jones position performs unexpectedly, Guangxi Wuzhou 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 Guangxi Wuzhou will offset losses from the drop in Guangxi Wuzhou's long position.| Dow Jones vs. Gentex | Dow Jones vs. American Axle Manufacturing | Dow Jones vs. Pearson PLC ADR | Dow Jones vs. Marine Products |
| Guangxi Wuzhou vs. China State Construction | Guangxi Wuzhou vs. Poly Real Estate | Guangxi Wuzhou vs. China Vanke Co | Guangxi Wuzhou vs. China Merchants Shekou |
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 Idea Breakdown module to analyze constituents of all Macroaxis ideas. Macroaxis investment ideas are predefined, sector-focused investing themes.
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