Correlation Between Dow Jones and Guangdong Skychem
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By analyzing existing cross correlation between Dow Jones Industrial and Guangdong Skychem Technology, you can compare the effects of market volatilities on Dow Jones and Guangdong Skychem 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 Guangdong Skychem. Check out your portfolio center. Please also check ongoing floating volatility patterns of Dow Jones and Guangdong Skychem.
Diversification Opportunities for Dow Jones and Guangdong Skychem
0.47 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Dow and Guangdong is 0.47. Overlapping area represents the amount of risk that can be diversified away by holding Dow Jones Industrial and Guangdong Skychem Technology in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Guangdong Skychem 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 Guangdong Skychem. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Guangdong Skychem has no effect on the direction of Dow Jones i.e., Dow Jones and Guangdong Skychem go up and down completely randomly.
Pair Corralation between Dow Jones and Guangdong Skychem
Assuming the 90 days trading horizon Dow Jones Industrial is expected to generate 0.21 times more return on investment than Guangdong Skychem. However, Dow Jones Industrial is 4.79 times less risky than Guangdong Skychem. It trades about -0.19 of its potential returns per unit of risk. Guangdong Skychem Technology is currently generating about -0.07 per unit of risk. If you would invest 4,371,748 in Dow Jones Industrial on October 16, 2024 and sell it today you would lose (142,036) from holding Dow Jones Industrial or give up 3.25% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 95.0% |
| Values | Daily Returns |
Dow Jones Industrial vs. Guangdong Skychem Technology
Performance |
| Timeline |
Dow Jones and Guangdong Skychem Volatility Contrast
Predicted Return Density |
| Returns |
Dow Jones Industrial
Pair trading matchups for Dow Jones
Guangdong Skychem Technology
Pair trading matchups for Guangdong Skychem
Pair Trading with Dow Jones and Guangdong Skychem
The main advantage of trading using opposite Dow Jones and Guangdong Skychem positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Dow Jones position performs unexpectedly, Guangdong Skychem 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 Guangdong Skychem will offset losses from the drop in Guangdong Skychem'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 |
| Guangdong Skychem vs. Kunwu Jiuding Investment | Guangdong Skychem vs. Xiandai Investment Co | Guangdong Skychem vs. Hubei Geoway Investment | Guangdong Skychem vs. Henan Shuanghui Investment |
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 Positions Ratings module to determine portfolio positions ratings based on digital equity recommendations. Macroaxis instant position ratings are based on combination of fundamental analysis and risk-adjusted market performance.
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