Correlation Between Dow Jones and Guangzhou Fangbang
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By analyzing existing cross correlation between Dow Jones Industrial and Guangzhou Fangbang Electronics, you can compare the effects of market volatilities on Dow Jones and Guangzhou Fangbang 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 Guangzhou Fangbang. Check out your portfolio center. Please also check ongoing floating volatility patterns of Dow Jones and Guangzhou Fangbang.
Diversification Opportunities for Dow Jones and Guangzhou Fangbang
0.29 | Correlation Coefficient |
Modest diversification
The 3 months correlation between Dow and Guangzhou is 0.29. Overlapping area represents the amount of risk that can be diversified away by holding Dow Jones Industrial and Guangzhou Fangbang Electronics in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Guangzhou Fangbang 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 Guangzhou Fangbang. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Guangzhou Fangbang has no effect on the direction of Dow Jones i.e., Dow Jones and Guangzhou Fangbang go up and down completely randomly.
Pair Corralation between Dow Jones and Guangzhou Fangbang
Assuming the 90 days trading horizon Dow Jones Industrial is expected to generate 0.17 times more return on investment than Guangzhou Fangbang. However, Dow Jones Industrial is 5.91 times less risky than Guangzhou Fangbang. It trades about 0.07 of its potential returns per unit of risk. Guangzhou Fangbang Electronics is currently generating about 0.0 per unit of risk. If you would invest 3,374,384 in Dow Jones Industrial on October 16, 2024 and sell it today you would earn a total of 855,328 from holding Dow Jones Industrial or generate 25.35% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 96.57% |
| Values | Daily Returns |
Dow Jones Industrial vs. Guangzhou Fangbang Electronics
Performance |
| Timeline |
Dow Jones and Guangzhou Fangbang Volatility Contrast
Predicted Return Density |
| Returns |
Dow Jones Industrial
Pair trading matchups for Dow Jones
Guangzhou Fangbang Electronics
Pair trading matchups for Guangzhou Fangbang
Pair Trading with Dow Jones and Guangzhou Fangbang
The main advantage of trading using opposite Dow Jones and Guangzhou Fangbang positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Dow Jones position performs unexpectedly, Guangzhou Fangbang 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 Guangzhou Fangbang will offset losses from the drop in Guangzhou Fangbang's long position.| Dow Jones vs. LB Foster | Dow Jones vs. Definitive Healthcare Corp | Dow Jones vs. TFI International | Dow Jones vs. Ryanair Holdings PLC |
| Guangzhou Fangbang vs. Universal Scientific Industrial | Guangzhou Fangbang vs. Jiaozuo Wanfang Aluminum | Guangzhou Fangbang vs. Porton Fine Chemicals | Guangzhou Fangbang vs. Shanghai Yanpu Metal |
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 FinTech Suite module to use AI to screen and filter profitable investment opportunities.
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