Correlation Between Dow Jones and ZIJIN MINING
Can any of the company-specific risk be diversified away by investing in both Dow Jones and ZIJIN MINING at the same time? Although using a correlation coefficient on its own may not help to predict future stock returns, this module helps to understand the diversifiable risk of combining Dow Jones and ZIJIN MINING into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Dow Jones Industrial and ZIJIN MINING H , you can compare the effects of market volatilities on Dow Jones and ZIJIN MINING 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 ZIJIN MINING. Check out your portfolio center. Please also check ongoing floating volatility patterns of Dow Jones and ZIJIN MINING.
Diversification Opportunities for Dow Jones and ZIJIN MINING
-0.41 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Dow and ZIJIN is -0.41. Overlapping area represents the amount of risk that can be diversified away by holding Dow Jones Industrial and ZIJIN MINING H in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on ZIJIN MINING H 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 ZIJIN MINING. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of ZIJIN MINING H has no effect on the direction of Dow Jones i.e., Dow Jones and ZIJIN MINING go up and down completely randomly.
Pair Corralation between Dow Jones and ZIJIN MINING
Assuming the 90 days trading horizon Dow Jones Industrial is expected to generate 0.37 times more return on investment than ZIJIN MINING. However, Dow Jones Industrial is 2.67 times less risky than ZIJIN MINING. It trades about -0.27 of its potential returns per unit of risk. ZIJIN MINING H is currently generating about -0.15 per unit of risk. If you would invest 4,440,193 in Dow Jones Industrial on October 9, 2024 and sell it today you would lose (187,357) from holding Dow Jones Industrial or give up 4.22% of portfolio value over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Against |
Strength | Very Weak |
Accuracy | 80.95% |
Values | Daily Returns |
Dow Jones Industrial vs. ZIJIN MINING H
Performance |
Timeline |
Dow Jones and ZIJIN MINING Volatility Contrast
Predicted Return Density |
Returns |
Dow Jones Industrial
Pair trading matchups for Dow Jones
ZIJIN MINING H
Pair trading matchups for ZIJIN MINING
Pair Trading with Dow Jones and ZIJIN MINING
The main advantage of trading using opposite Dow Jones and ZIJIN MINING positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Dow Jones position performs unexpectedly, ZIJIN MINING 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 ZIJIN MINING will offset losses from the drop in ZIJIN MINING's long position.Dow Jones vs. FMC Corporation | Dow Jones vs. Chemours Co | Dow Jones vs. Park Electrochemical | Dow Jones vs. Griffon |
ZIJIN MINING vs. Singapore Telecommunications Limited | ZIJIN MINING vs. INTERSHOP Communications Aktiengesellschaft | ZIJIN MINING vs. Comba Telecom Systems | ZIJIN MINING vs. Ribbon Communications |
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 Alpha Finder module to use alpha and beta coefficients to find investment opportunities after accounting for the risk.
Other Complementary Tools
Headlines Timeline Stay connected to all market stories and filter out noise. Drill down to analyze hype elasticity | |
Options Analysis Analyze and evaluate options and option chains as a potential hedge for your portfolios | |
Correlation Analysis Reduce portfolio risk simply by holding instruments which are not perfectly correlated | |
Pair Correlation Compare performance and examine fundamental relationship between any two equity instruments | |
Analyst Advice Analyst recommendations and target price estimates broken down by several categories |