Correlation Between Dow Jones and CITIC Guoan
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By analyzing existing cross correlation between Dow Jones Industrial and CITIC Guoan Information, you can compare the effects of market volatilities on Dow Jones and CITIC Guoan 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 CITIC Guoan. Check out your portfolio center. Please also check ongoing floating volatility patterns of Dow Jones and CITIC Guoan.
Diversification Opportunities for Dow Jones and CITIC Guoan
0.06 | Correlation Coefficient |
Significant diversification
The 3 months correlation between Dow and CITIC is 0.06. Overlapping area represents the amount of risk that can be diversified away by holding Dow Jones Industrial and CITIC Guoan Information in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on CITIC Guoan Information 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 CITIC Guoan. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of CITIC Guoan Information has no effect on the direction of Dow Jones i.e., Dow Jones and CITIC Guoan go up and down completely randomly.
Pair Corralation between Dow Jones and CITIC Guoan
Assuming the 90 days trading horizon Dow Jones Industrial is expected to generate 0.25 times more return on investment than CITIC Guoan. However, Dow Jones Industrial is 3.99 times less risky than CITIC Guoan. It trades about 0.12 of its potential returns per unit of risk. CITIC Guoan Information is currently generating about 0.03 per unit of risk. If you would invest 4,239,227 in Dow Jones Industrial on December 3, 2024 and sell it today you would earn a total of 144,864 from holding Dow Jones Industrial or generate 3.42% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Together |
Strength | Insignificant |
Accuracy | 92.5% |
Values | Daily Returns |
Dow Jones Industrial vs. CITIC Guoan Information
Performance |
Timeline |
Dow Jones and CITIC Guoan Volatility Contrast
Predicted Return Density |
Returns |
Dow Jones Industrial
Pair trading matchups for Dow Jones
CITIC Guoan Information
Pair trading matchups for CITIC Guoan
Pair Trading with Dow Jones and CITIC Guoan
The main advantage of trading using opposite Dow Jones and CITIC Guoan positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Dow Jones position performs unexpectedly, CITIC Guoan 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 CITIC Guoan will offset losses from the drop in CITIC Guoan's long position.Dow Jones vs. PennantPark Floating Rate | Dow Jones vs. HNI Corp | Dow Jones vs. Perseus Mining Limited | Dow Jones vs. Shimmick Common |
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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 Stock Tickers module to use high-impact, comprehensive, and customizable stock tickers that can be easily integrated to any websites.
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