Correlation Between Dow Jones and Zhejiang Yongjin
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By analyzing existing cross correlation between Dow Jones Industrial and Zhejiang Yongjin Metal, you can compare the effects of market volatilities on Dow Jones and Zhejiang Yongjin 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 Zhejiang Yongjin. Check out your portfolio center. Please also check ongoing floating volatility patterns of Dow Jones and Zhejiang Yongjin.
Diversification Opportunities for Dow Jones and Zhejiang Yongjin
0.72 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Dow and Zhejiang is 0.72. Overlapping area represents the amount of risk that can be diversified away by holding Dow Jones Industrial and Zhejiang Yongjin Metal in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Zhejiang Yongjin Metal 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 Zhejiang Yongjin. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Zhejiang Yongjin Metal has no effect on the direction of Dow Jones i.e., Dow Jones and Zhejiang Yongjin go up and down completely randomly.
Pair Corralation between Dow Jones and Zhejiang Yongjin
Assuming the 90 days trading horizon Dow Jones Industrial is expected to generate 0.48 times more return on investment than Zhejiang Yongjin. However, Dow Jones Industrial is 2.07 times less risky than Zhejiang Yongjin. It trades about 0.21 of its potential returns per unit of risk. Zhejiang Yongjin Metal is currently generating about -0.08 per unit of risk. If you would invest 4,237,436 in Dow Jones Industrial on August 25, 2024 and sell it today you would earn a total of 192,215 from holding Dow Jones Industrial or generate 4.54% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 95.65% |
| Values | Daily Returns |
Dow Jones Industrial vs. Zhejiang Yongjin Metal
Performance |
| Timeline |
Dow Jones and Zhejiang Yongjin Volatility Contrast
Predicted Return Density |
| Returns |
Dow Jones Industrial
Pair trading matchups for Dow Jones
Zhejiang Yongjin Metal
Pair trading matchups for Zhejiang Yongjin
Pair Trading with Dow Jones and Zhejiang Yongjin
The main advantage of trading using opposite Dow Jones and Zhejiang Yongjin positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Dow Jones position performs unexpectedly, Zhejiang Yongjin 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 Zhejiang Yongjin will offset losses from the drop in Zhejiang Yongjin's long position.| Dow Jones vs. Vistra Energy Corp | Dow Jones vs. Fluence Energy | Dow Jones vs. Old Republic International | Dow Jones vs. Empresa Distribuidora y |
| Zhejiang Yongjin vs. Zhejiang Yayi Metal | Zhejiang Yongjin vs. Ye Chiu Metal | Zhejiang Yongjin vs. Dalian Thermal Power | Zhejiang Yongjin vs. Lonkey Industrial 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 Equity Forecasting module to use basic forecasting models to generate price predictions and determine price momentum.
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