Correlation Between Jadeart and Dow Jones
Can any of the company-specific risk be diversified away by investing in both Jadeart and Dow Jones 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 Jadeart and Dow Jones into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Jadeart Group and Dow Jones Industrial, you can compare the effects of market volatilities on Jadeart and Dow Jones 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 Jadeart with a short position of Dow Jones. Check out your portfolio center. Please also check ongoing floating volatility patterns of Jadeart and Dow Jones.
Diversification Opportunities for Jadeart and Dow Jones
Very good diversification
The 3 months correlation between Jadeart and Dow is -0.49. Overlapping area represents the amount of risk that can be diversified away by holding Jadeart Group and Dow Jones Industrial in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Dow Jones Industrial and Jadeart 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 Jadeart Group are associated (or correlated) with Dow Jones. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Dow Jones Industrial has no effect on the direction of Jadeart i.e., Jadeart and Dow Jones go up and down completely randomly.
Pair Corralation between Jadeart and Dow Jones
Given the investment horizon of 90 days Jadeart Group is expected to generate 28.74 times more return on investment than Dow Jones. However, Jadeart is 28.74 times more volatile than Dow Jones Industrial. It trades about 0.09 of its potential returns per unit of risk. Dow Jones Industrial is currently generating about 0.08 per unit of risk. If you would invest 0.80 in Jadeart Group on August 30, 2024 and sell it today you would lose (0.40) from holding Jadeart Group or give up 50.0% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Jadeart Group vs. Dow Jones Industrial
Performance |
| Timeline |
Jadeart and Dow Jones Volatility Contrast
Predicted Return Density |
| Returns |
Jadeart Group
Pair trading matchups for Jadeart
Dow Jones Industrial
Pair trading matchups for Dow Jones
Pair Trading with Jadeart and Dow Jones
The main advantage of trading using opposite Jadeart and Dow Jones positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Jadeart position performs unexpectedly, Dow Jones 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 Dow Jones will offset losses from the drop in Dow Jones' long position.| Jadeart vs. China Sun Grp | Jadeart vs. Lotus Pharmaceuticals | Jadeart vs. China Medicine | Jadeart vs. China Clean Energy |
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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 Portfolio Center module to all portfolio management and optimization tools to improve performance of your portfolios.
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