Correlation Between Dow Jones and Zhejiang Longsheng
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By analyzing existing cross correlation between Dow Jones Industrial and Zhejiang Longsheng Group, you can compare the effects of market volatilities on Dow Jones and Zhejiang Longsheng 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 Zhejiang Longsheng. Check out your portfolio center. Please also check ongoing floating volatility patterns of Dow Jones and Zhejiang Longsheng.
Diversification Opportunities for Dow Jones and Zhejiang Longsheng
-0.41 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Dow and Zhejiang is -0.41. Overlapping area represents the amount of risk that can be diversified away by holding Dow Jones Industrial and Zhejiang Longsheng Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Zhejiang Longsheng 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 Zhejiang Longsheng. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Zhejiang Longsheng has no effect on the direction of Dow Jones i.e., Dow Jones and Zhejiang Longsheng go up and down completely randomly.
Pair Corralation between Dow Jones and Zhejiang Longsheng
Assuming the 90 days trading horizon Dow Jones Industrial is expected to generate 0.78 times more return on investment than Zhejiang Longsheng. However, Dow Jones Industrial is 1.28 times less risky than Zhejiang Longsheng. It trades about -0.08 of its potential returns per unit of risk. Zhejiang Longsheng Group is currently generating about -0.18 per unit of risk. If you would invest 4,440,193 in Dow Jones Industrial on December 7, 2024 and sell it today you would lose (182,285) from holding Dow Jones Industrial or give up 4.11% of portfolio value over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Against |
Strength | Very Weak |
Accuracy | 95.08% |
Values | Daily Returns |
Dow Jones Industrial vs. Zhejiang Longsheng Group
Performance |
Timeline |
Dow Jones and Zhejiang Longsheng Volatility Contrast
Predicted Return Density |
Returns |
Dow Jones Industrial
Pair trading matchups for Dow Jones
Zhejiang Longsheng Group
Pair trading matchups for Zhejiang Longsheng
Pair Trading with Dow Jones and Zhejiang Longsheng
The main advantage of trading using opposite Dow Jones and Zhejiang Longsheng positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Dow Jones position performs unexpectedly, Zhejiang Longsheng 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 Zhejiang Longsheng will offset losses from the drop in Zhejiang Longsheng's long position.Dow Jones vs. BBB Foods | Dow Jones vs. Kellanova | Dow Jones vs. Uber Technologies | Dow Jones vs. Willamette Valley Vineyards |
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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 Theme Ratings module to determine theme ratings based on digital equity recommendations. Macroaxis theme ratings are based on combination of fundamental analysis and risk-adjusted market performance.
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