Correlation Between Jiangxi Copper and Dow Jones
Can any of the company-specific risk be diversified away by investing in both Jiangxi Copper 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 Jiangxi Copper and Dow Jones into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Jiangxi Copper and Dow Jones Industrial, you can compare the effects of market volatilities on Jiangxi Copper 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 Jiangxi Copper with a short position of Dow Jones. Check out your portfolio center. Please also check ongoing floating volatility patterns of Jiangxi Copper and Dow Jones.
Diversification Opportunities for Jiangxi Copper and Dow Jones
-0.36 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Jiangxi and Dow is -0.36. Overlapping area represents the amount of risk that can be diversified away by holding Jiangxi Copper 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 Jiangxi Copper 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 Jiangxi Copper 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 Jiangxi Copper i.e., Jiangxi Copper and Dow Jones go up and down completely randomly.
Pair Corralation between Jiangxi Copper and Dow Jones
Assuming the 90 days horizon Jiangxi Copper is expected to under-perform the Dow Jones. But the pink sheet apears to be less risky and, when comparing its historical volatility, Jiangxi Copper is 1.94 times less risky than Dow Jones. The pink sheet trades about -0.24 of its potential returns per unit of risk. The Dow Jones Industrial is currently generating about 0.2 of returns per unit of risk over similar time horizon. If you would invest 4,348,783 in Dow Jones Industrial on November 18, 2024 and sell it today you would earn a total of 105,825 from holding Dow Jones Industrial or generate 2.43% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 85.71% |
| Values | Daily Returns |
Jiangxi Copper vs. Dow Jones Industrial
Performance |
| Timeline |
Jiangxi Copper and Dow Jones Volatility Contrast
Predicted Return Density |
| Returns |
Jiangxi Copper
Pair trading matchups for Jiangxi Copper
Dow Jones Industrial
Pair trading matchups for Dow Jones
Pair Trading with Jiangxi Copper and Dow Jones
The main advantage of trading using opposite Jiangxi Copper and Dow Jones positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Jiangxi Copper 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.| Jiangxi Copper vs. Hot Chili Limited | Jiangxi Copper vs. Three Valley Copper | Jiangxi Copper vs. Los Andes Copper | Jiangxi Copper vs. QC Copper and |
| Dow Jones vs. Palomar Holdings | Dow Jones vs. Mesa Air Group | Dow Jones vs. LATAM Airlines Group | Dow Jones vs. Unum Group |
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 Efficient Frontier module to plot and analyze your portfolio and positions against risk-return landscape of the market..
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