Correlation Between Shenzhen Agricultural and Dow Jones
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By analyzing existing cross correlation between Shenzhen Agricultural Products and Dow Jones Industrial, you can compare the effects of market volatilities on Shenzhen Agricultural and Dow Jones 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 Shenzhen Agricultural with a short position of Dow Jones. Check out your portfolio center. Please also check ongoing floating volatility patterns of Shenzhen Agricultural and Dow Jones.
Diversification Opportunities for Shenzhen Agricultural and Dow Jones
0.85 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Shenzhen and Dow is 0.85. Overlapping area represents the amount of risk that can be diversified away by holding Shenzhen Agricultural Products and Dow Jones Industrial in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Dow Jones Industrial and Shenzhen Agricultural 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 Shenzhen Agricultural Products are associated (or correlated) with Dow Jones. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Dow Jones Industrial has no effect on the direction of Shenzhen Agricultural i.e., Shenzhen Agricultural and Dow Jones go up and down completely randomly.
Pair Corralation between Shenzhen Agricultural and Dow Jones
Assuming the 90 days trading horizon Shenzhen Agricultural Products is expected to generate 3.26 times more return on investment than Dow Jones. However, Shenzhen Agricultural is 3.26 times more volatile than Dow Jones Industrial. It trades about 0.3 of its potential returns per unit of risk. Dow Jones Industrial is currently generating about 0.12 per unit of risk. If you would invest 537.00 in Shenzhen Agricultural Products on September 14, 2024 and sell it today you would earn a total of 258.00 from holding Shenzhen Agricultural Products or generate 48.04% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Together |
Strength | Strong |
Accuracy | 90.48% |
Values | Daily Returns |
Shenzhen Agricultural Products vs. Dow Jones Industrial
Performance |
Timeline |
Shenzhen Agricultural and Dow Jones Volatility Contrast
Predicted Return Density |
Returns |
Shenzhen Agricultural Products
Pair trading matchups for Shenzhen Agricultural
Dow Jones Industrial
Pair trading matchups for Dow Jones
Pair Trading with Shenzhen Agricultural and Dow Jones
The main advantage of trading using opposite Shenzhen Agricultural and Dow Jones positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Shenzhen Agricultural position performs unexpectedly, Dow Jones 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 Dow Jones will offset losses from the drop in Dow Jones' long position.Shenzhen Agricultural vs. Shanxi Lanhua Sci Tech | Shenzhen Agricultural vs. INKON Life Technology | Shenzhen Agricultural vs. Kuang Chi Technologies | Shenzhen Agricultural vs. Guangzhou Jinyi Media |
Dow Jones vs. Hurco Companies | Dow Jones vs. Tyson Foods | Dow Jones vs. MYR Group | Dow Jones vs. Cannae Holdings |
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 CEOs Directory module to screen CEOs from public companies around the world.
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