Correlation Between Dow Jones and Sany Heavy
Can any of the company-specific risk be diversified away by investing in both Dow Jones and Sany Heavy 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 Sany Heavy 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 Sany Heavy Equipment, you can compare the effects of market volatilities on Dow Jones and Sany Heavy 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 Sany Heavy. Check out your portfolio center. Please also check ongoing floating volatility patterns of Dow Jones and Sany Heavy.
Diversification Opportunities for Dow Jones and Sany Heavy
0.42 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Dow and Sany is 0.42. Overlapping area represents the amount of risk that can be diversified away by holding Dow Jones Industrial and Sany Heavy Equipment in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Sany Heavy Equipment 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 Sany Heavy. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Sany Heavy Equipment has no effect on the direction of Dow Jones i.e., Dow Jones and Sany Heavy go up and down completely randomly.
Pair Corralation between Dow Jones and Sany Heavy
Assuming the 90 days trading horizon Dow Jones Industrial is expected to generate 0.21 times more return on investment than Sany Heavy. However, Dow Jones Industrial is 4.83 times less risky than Sany Heavy. It trades about 0.16 of its potential returns per unit of risk. Sany Heavy Equipment is currently generating about 0.0 per unit of risk. If you would invest 3,880,733 in Dow Jones Industrial on September 3, 2024 and sell it today you would earn a total of 610,332 from holding Dow Jones Industrial or generate 15.73% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 96.9% |
| Values | Daily Returns |
Dow Jones Industrial vs. Sany Heavy Equipment
Performance |
| Timeline |
Dow Jones and Sany Heavy Volatility Contrast
Predicted Return Density |
| Returns |
Dow Jones Industrial
Pair trading matchups for Dow Jones
Sany Heavy Equipment
Pair trading matchups for Sany Heavy
Pair Trading with Dow Jones and Sany Heavy
The main advantage of trading using opposite Dow Jones and Sany Heavy positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Dow Jones position performs unexpectedly, Sany Heavy 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 Sany Heavy will offset losses from the drop in Sany Heavy's long position.| Dow Jones vs. Eastern Co | Dow Jones vs. Uber Technologies | Dow Jones vs. AKITA Drilling | Dow Jones vs. Chemours Co |
| Sany Heavy vs. United Rentals | Sany Heavy vs. SHIP HEALTHCARE HLDGINC | Sany Heavy vs. Air Lease | Sany Heavy vs. DXC Technology 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 Idea Analyzer module to analyze all characteristics, volatility and risk-adjusted return of Macroaxis ideas.
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