Correlation Between Dow Jones and Huize Holding
Can any of the company-specific risk be diversified away by investing in both Dow Jones and Huize Holding at the same time? Although using a correlation coefficient on its own may not help to predict future stock returns, this module helps to understand the diversifiable risk of combining Dow Jones and Huize Holding into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Dow Jones Industrial and Huize Holding, you can compare the effects of market volatilities on Dow Jones and Huize Holding 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 Huize Holding. Check out your portfolio center. Please also check ongoing floating volatility patterns of Dow Jones and Huize Holding.
Diversification Opportunities for Dow Jones and Huize Holding
-0.36 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Dow and Huize is -0.36. Overlapping area represents the amount of risk that can be diversified away by holding Dow Jones Industrial and Huize Holding in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Huize Holding 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 Huize Holding. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Huize Holding has no effect on the direction of Dow Jones i.e., Dow Jones and Huize Holding go up and down completely randomly.
Pair Corralation between Dow Jones and Huize Holding
Assuming the 90 days trading horizon Dow Jones is expected to generate 152.84 times less return on investment than Huize Holding. But when comparing it to its historical volatility, Dow Jones Industrial is 138.05 times less risky than Huize Holding. It trades about 0.09 of its potential returns per unit of risk. Huize Holding is currently generating about 0.1 of returns per unit of risk over similar time horizon. If you would invest 89.00 in Huize Holding on November 1, 2024 and sell it today you would earn a total of 243.00 from holding Huize Holding or generate 273.03% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 98.78% |
| Values | Daily Returns |
Dow Jones Industrial vs. Huize Holding
Performance |
| Timeline |
Dow Jones and Huize Holding Volatility Contrast
Predicted Return Density |
| Returns |
Dow Jones Industrial
Pair trading matchups for Dow Jones
Huize Holding
Pair trading matchups for Huize Holding
Pair Trading with Dow Jones and Huize Holding
The main advantage of trading using opposite Dow Jones and Huize Holding positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Dow Jones position performs unexpectedly, Huize Holding 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 Huize Holding will offset losses from the drop in Huize Holding's long position.| Dow Jones vs. WEC Energy Group | Dow Jones vs. Pure Cycle | Dow Jones vs. Tandy Leather Factory | Dow Jones vs. Tapestry |
| Huize Holding vs. CorVel Corp | Huize Holding vs. Erie Indemnity | Huize Holding vs. Crawford Company | Huize Holding vs. eHealth |
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 Alpha Finder module to use alpha and beta coefficients to find investment opportunities after accounting for the risk.
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