Correlation Between Dow Jones and Huizhou Desay
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By analyzing existing cross correlation between Dow Jones Industrial and Huizhou Desay SV, you can compare the effects of market volatilities on Dow Jones and Huizhou Desay 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 Huizhou Desay. Check out your portfolio center. Please also check ongoing floating volatility patterns of Dow Jones and Huizhou Desay.
Diversification Opportunities for Dow Jones and Huizhou Desay
0.42 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Dow and Huizhou is 0.42. Overlapping area represents the amount of risk that can be diversified away by holding Dow Jones Industrial and Huizhou Desay SV in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Huizhou Desay SV 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 Huizhou Desay. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Huizhou Desay SV has no effect on the direction of Dow Jones i.e., Dow Jones and Huizhou Desay go up and down completely randomly.
Pair Corralation between Dow Jones and Huizhou Desay
Assuming the 90 days trading horizon Dow Jones Industrial is expected to generate 0.33 times more return on investment than Huizhou Desay. However, Dow Jones Industrial is 2.99 times less risky than Huizhou Desay. It trades about -0.21 of its potential returns per unit of risk. Huizhou Desay SV is currently generating about -0.29 per unit of risk. If you would invest 4,473,657 in Dow Jones Industrial on September 25, 2024 and sell it today you would lose (143,954) from holding Dow Jones Industrial or give up 3.22% of portfolio value over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Together |
Strength | Weak |
Accuracy | 95.45% |
Values | Daily Returns |
Dow Jones Industrial vs. Huizhou Desay SV
Performance |
Timeline |
Dow Jones and Huizhou Desay Volatility Contrast
Predicted Return Density |
Returns |
Dow Jones Industrial
Pair trading matchups for Dow Jones
Huizhou Desay SV
Pair trading matchups for Huizhou Desay
Pair Trading with Dow Jones and Huizhou Desay
The main advantage of trading using opposite Dow Jones and Huizhou Desay positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Dow Jones position performs unexpectedly, Huizhou Desay 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 Huizhou Desay will offset losses from the drop in Huizhou Desay's long position.Dow Jones vs. Aerofoam Metals | Dow Jones vs. Lion One Metals | Dow Jones vs. Blue Moon Metals | Dow Jones vs. Xunlei Ltd Adr |
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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 Manager module to state of the art Portfolio Manager to monitor and improve performance of your invested capital.
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