Correlation Between Dow Jones and Chongqing Gas
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By analyzing existing cross correlation between Dow Jones Industrial and Chongqing Gas Grp, you can compare the effects of market volatilities on Dow Jones and Chongqing Gas 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 Chongqing Gas. Check out your portfolio center. Please also check ongoing floating volatility patterns of Dow Jones and Chongqing Gas.
Diversification Opportunities for Dow Jones and Chongqing Gas
0.82 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Dow and Chongqing is 0.82. Overlapping area represents the amount of risk that can be diversified away by holding Dow Jones Industrial and Chongqing Gas Grp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Chongqing Gas Grp 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 Chongqing Gas. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Chongqing Gas Grp has no effect on the direction of Dow Jones i.e., Dow Jones and Chongqing Gas go up and down completely randomly.
Pair Corralation between Dow Jones and Chongqing Gas
Assuming the 90 days trading horizon Dow Jones Industrial is expected to generate 0.48 times more return on investment than Chongqing Gas. However, Dow Jones Industrial is 2.07 times less risky than Chongqing Gas. It trades about 0.08 of its potential returns per unit of risk. Chongqing Gas Grp is currently generating about -0.03 per unit of risk. If you would invest 3,410,864 in Dow Jones Industrial on September 3, 2024 and sell it today you would earn a total of 1,080,201 from holding Dow Jones Industrial or generate 31.67% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 96.36% |
| Values | Daily Returns |
Dow Jones Industrial vs. Chongqing Gas Grp
Performance |
| Timeline |
Dow Jones and Chongqing Gas Volatility Contrast
Predicted Return Density |
| Returns |
Dow Jones Industrial
Pair trading matchups for Dow Jones
Chongqing Gas Grp
Pair trading matchups for Chongqing Gas
Pair Trading with Dow Jones and Chongqing Gas
The main advantage of trading using opposite Dow Jones and Chongqing Gas positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Dow Jones position performs unexpectedly, Chongqing Gas 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 Chongqing Gas will offset losses from the drop in Chongqing Gas' long position.| Dow Jones vs. Eastern Co | Dow Jones vs. Uber Technologies | Dow Jones vs. AKITA Drilling | Dow Jones vs. Chemours Co |
| Chongqing Gas vs. Zhejiang Yayi Metal | Chongqing Gas vs. Shandong Hongchuang Aluminum | Chongqing Gas vs. Guangdong Jingyi Metal | Chongqing Gas vs. Jilin Jlu Communication |
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 Search module to search for actively traded equities including funds and ETFs from over 30 global markets.
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