Correlation Between Dow Jones and Hunan Tyen
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By analyzing existing cross correlation between Dow Jones Industrial and Hunan Tyen Machinery, you can compare the effects of market volatilities on Dow Jones and Hunan Tyen 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 Hunan Tyen. Check out your portfolio center. Please also check ongoing floating volatility patterns of Dow Jones and Hunan Tyen.
Diversification Opportunities for Dow Jones and Hunan Tyen
0.73 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Dow and Hunan is 0.73. Overlapping area represents the amount of risk that can be diversified away by holding Dow Jones Industrial and Hunan Tyen Machinery in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Hunan Tyen Machinery 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 Hunan Tyen. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Hunan Tyen Machinery has no effect on the direction of Dow Jones i.e., Dow Jones and Hunan Tyen go up and down completely randomly.
Pair Corralation between Dow Jones and Hunan Tyen
Assuming the 90 days trading horizon Dow Jones Industrial is expected to generate 0.23 times more return on investment than Hunan Tyen. However, Dow Jones Industrial is 4.27 times less risky than Hunan Tyen. It trades about 0.27 of its potential returns per unit of risk. Hunan Tyen Machinery is currently generating about -0.06 per unit of risk. If you would invest 4,238,757 in Dow Jones Industrial on August 29, 2024 and sell it today you would earn a total of 247,274 from holding Dow Jones Industrial or generate 5.83% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Dow Jones Industrial vs. Hunan Tyen Machinery
Performance |
| Timeline |
Dow Jones and Hunan Tyen Volatility Contrast
Predicted Return Density |
| Returns |
Dow Jones Industrial
Pair trading matchups for Dow Jones
Hunan Tyen Machinery
Pair trading matchups for Hunan Tyen
Pair Trading with Dow Jones and Hunan Tyen
The main advantage of trading using opposite Dow Jones and Hunan Tyen positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Dow Jones position performs unexpectedly, Hunan Tyen 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 Hunan Tyen will offset losses from the drop in Hunan Tyen's long position.| Dow Jones vs. CECO Environmental Corp | Dow Jones vs. Western Acquisition Ventures | Dow Jones vs. Tyson Foods | Dow Jones vs. Inflection Point Acquisition |
| Hunan Tyen vs. China State Construction | Hunan Tyen vs. Huafa Industrial Co | Hunan Tyen vs. China International Capital | Hunan Tyen vs. Kweichow Moutai Co |
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 File Import module to quickly import all of your third-party portfolios from your local drive in csv format.
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