Correlation Between Dow Jones and Ningxia Baofeng
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By analyzing existing cross correlation between Dow Jones Industrial and Ningxia Baofeng Energy, you can compare the effects of market volatilities on Dow Jones and Ningxia Baofeng 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 Ningxia Baofeng. Check out your portfolio center. Please also check ongoing floating volatility patterns of Dow Jones and Ningxia Baofeng.
Diversification Opportunities for Dow Jones and Ningxia Baofeng
0.28 | Correlation Coefficient |
Modest diversification
The 3 months correlation between Dow and Ningxia is 0.28. Overlapping area represents the amount of risk that can be diversified away by holding Dow Jones Industrial and Ningxia Baofeng Energy in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Ningxia Baofeng Energy 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 Ningxia Baofeng. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Ningxia Baofeng Energy has no effect on the direction of Dow Jones i.e., Dow Jones and Ningxia Baofeng go up and down completely randomly.
Pair Corralation between Dow Jones and Ningxia Baofeng
Assuming the 90 days trading horizon Dow Jones Industrial is expected to generate 0.4 times more return on investment than Ningxia Baofeng. However, Dow Jones Industrial is 2.52 times less risky than Ningxia Baofeng. It trades about -0.25 of its potential returns per unit of risk. Ningxia Baofeng Energy is currently generating about -0.15 per unit of risk. If you would invest 4,485,035 in Dow Jones Industrial on November 29, 2024 and sell it today you would lose (141,723) from holding Dow Jones Industrial or give up 3.16% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 76.19% |
| Values | Daily Returns |
Dow Jones Industrial vs. Ningxia Baofeng Energy
Performance |
| Timeline |
Dow Jones and Ningxia Baofeng Volatility Contrast
Predicted Return Density |
| Returns |
Dow Jones Industrial
Pair trading matchups for Dow Jones
Ningxia Baofeng Energy
Pair trading matchups for Ningxia Baofeng
Pair Trading with Dow Jones and Ningxia Baofeng
The main advantage of trading using opposite Dow Jones and Ningxia Baofeng positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Dow Jones position performs unexpectedly, Ningxia Baofeng 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 Ningxia Baofeng will offset losses from the drop in Ningxia Baofeng's long position.| Dow Jones vs. Starbucks | Dow Jones vs. Westinghouse Air Brake | Dow Jones vs. Finnair Oyj | Dow Jones vs. Mesa Air Group |
| Ningxia Baofeng vs. Zijin Mining Group | Ningxia Baofeng vs. Wanhua Chemical Group | Ningxia Baofeng vs. Baoshan Iron Steel | Ningxia Baofeng vs. Shandong Gold Mining |
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 Suggestion module to get suggestions outside of your existing asset allocation including your own model portfolios.
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