Correlation Between Shanghai Suochen and Dow Jones
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By analyzing existing cross correlation between Shanghai Suochen Information and Dow Jones Industrial, you can compare the effects of market volatilities on Shanghai Suochen 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 Shanghai Suochen with a short position of Dow Jones. Check out your portfolio center. Please also check ongoing floating volatility patterns of Shanghai Suochen and Dow Jones.
Diversification Opportunities for Shanghai Suochen and Dow Jones
0.7 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Shanghai and Dow is 0.7. Overlapping area represents the amount of risk that can be diversified away by holding Shanghai Suochen Information 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 Shanghai Suochen 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 Shanghai Suochen Information 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 Shanghai Suochen i.e., Shanghai Suochen and Dow Jones go up and down completely randomly.
Pair Corralation between Shanghai Suochen and Dow Jones
Assuming the 90 days trading horizon Shanghai Suochen Information is expected to generate 7.8 times more return on investment than Dow Jones. However, Shanghai Suochen is 7.8 times more volatile than Dow Jones Industrial. It trades about 0.18 of its potential returns per unit of risk. Dow Jones Industrial is currently generating about 0.11 per unit of risk. If you would invest 4,031 in Shanghai Suochen Information on September 15, 2024 and sell it today you would earn a total of 2,689 from holding Shanghai Suochen Information or generate 66.71% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Together |
Strength | Significant |
Accuracy | 90.63% |
Values | Daily Returns |
Shanghai Suochen Information vs. Dow Jones Industrial
Performance |
Timeline |
Shanghai Suochen and Dow Jones Volatility Contrast
Predicted Return Density |
Returns |
Shanghai Suochen Information
Pair trading matchups for Shanghai Suochen
Dow Jones Industrial
Pair trading matchups for Dow Jones
Pair Trading with Shanghai Suochen and Dow Jones
The main advantage of trading using opposite Shanghai Suochen and Dow Jones positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Shanghai Suochen 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.Shanghai Suochen vs. BTG Hotels Group | Shanghai Suochen vs. Postal Savings Bank | Shanghai Suochen vs. Shenwu Energy Saving | Shanghai Suochen vs. Shanghai CEO Environmental |
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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 Fundamental Analysis module to view fundamental data based on most recent published financial statements.
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