Correlation Between China Railway and Dow Jones
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By analyzing existing cross correlation between China Railway Materials and Dow Jones Industrial, you can compare the effects of market volatilities on China Railway 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 China Railway with a short position of Dow Jones. Check out your portfolio center. Please also check ongoing floating volatility patterns of China Railway and Dow Jones.
Diversification Opportunities for China Railway and Dow Jones
-0.2 | Correlation Coefficient |
Good diversification
The 3 months correlation between China and Dow is -0.2. Overlapping area represents the amount of risk that can be diversified away by holding China Railway Materials 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 China Railway 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 China Railway Materials 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 China Railway i.e., China Railway and Dow Jones go up and down completely randomly.
Pair Corralation between China Railway and Dow Jones
Assuming the 90 days trading horizon China Railway Materials is expected to under-perform the Dow Jones. In addition to that, China Railway is 1.54 times more volatile than Dow Jones Industrial. It trades about -0.05 of its total potential returns per unit of risk. Dow Jones Industrial is currently generating about -0.04 per unit of volatility. If you would invest 4,257,373 in Dow Jones Industrial on December 30, 2024 and sell it today you would lose (98,983) from holding Dow Jones Industrial or give up 2.32% of portfolio value over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Against |
Strength | Insignificant |
Accuracy | 95.16% |
Values | Daily Returns |
China Railway Materials vs. Dow Jones Industrial
Performance |
Timeline |
China Railway and Dow Jones Volatility Contrast
Predicted Return Density |
Returns |
China Railway Materials
Pair trading matchups for China Railway
Dow Jones Industrial
Pair trading matchups for Dow Jones
Pair Trading with China Railway and Dow Jones
The main advantage of trading using opposite China Railway and Dow Jones positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if China Railway 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.China Railway vs. Qtone Education Group | China Railway vs. Linewell Software Co | China Railway vs. Shandong Publishing Media | China Railway vs. Dhc Software Co |
Dow Jones vs. Highway Holdings Limited | Dow Jones vs. Companhia Siderurgica Nacional | Dow Jones vs. POSCO Holdings | Dow Jones vs. Grupo Simec SAB |
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 Insider Screener module to find insiders across different sectors to evaluate their impact on performance.
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