Correlation Between Dow Jones and Shenzhen SDG
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By analyzing existing cross correlation between Dow Jones Industrial and Shenzhen SDG Service, you can compare the effects of market volatilities on Dow Jones and Shenzhen SDG 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 Shenzhen SDG. Check out your portfolio center. Please also check ongoing floating volatility patterns of Dow Jones and Shenzhen SDG.
Diversification Opportunities for Dow Jones and Shenzhen SDG
0.36 | Correlation Coefficient |
Weak diversification
The 3 months correlation between Dow and Shenzhen is 0.36. Overlapping area represents the amount of risk that can be diversified away by holding Dow Jones Industrial and Shenzhen SDG Service in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Shenzhen SDG Service 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 Shenzhen SDG. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Shenzhen SDG Service has no effect on the direction of Dow Jones i.e., Dow Jones and Shenzhen SDG go up and down completely randomly.
Pair Corralation between Dow Jones and Shenzhen SDG
Assuming the 90 days trading horizon Dow Jones Industrial is expected to generate 0.25 times more return on investment than Shenzhen SDG. However, Dow Jones Industrial is 4.03 times less risky than Shenzhen SDG. It trades about -0.21 of its potential returns per unit of risk. Shenzhen SDG Service is currently generating about -0.11 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 | Very Weak |
Accuracy | 95.45% |
Values | Daily Returns |
Dow Jones Industrial vs. Shenzhen SDG Service
Performance |
Timeline |
Dow Jones and Shenzhen SDG Volatility Contrast
Predicted Return Density |
Returns |
Dow Jones Industrial
Pair trading matchups for Dow Jones
Shenzhen SDG Service
Pair trading matchups for Shenzhen SDG
Pair Trading with Dow Jones and Shenzhen SDG
The main advantage of trading using opposite Dow Jones and Shenzhen SDG positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Dow Jones position performs unexpectedly, Shenzhen SDG 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 Shenzhen SDG will offset losses from the drop in Shenzhen SDG'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 Stock Screener module to find equities using a custom stock filter or screen asymmetry in trading patterns, price, volume, or investment outlook..
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