Correlation Between Nanhua Bio and Dow Jones
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By analyzing existing cross correlation between Nanhua Bio Medicine and Dow Jones Industrial, you can compare the effects of market volatilities on Nanhua Bio 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 Nanhua Bio with a short position of Dow Jones. Check out your portfolio center. Please also check ongoing floating volatility patterns of Nanhua Bio and Dow Jones.
Diversification Opportunities for Nanhua Bio and Dow Jones
0.69 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Nanhua and Dow is 0.69. Overlapping area represents the amount of risk that can be diversified away by holding Nanhua Bio Medicine 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 Nanhua Bio 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 Nanhua Bio Medicine 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 Nanhua Bio i.e., Nanhua Bio and Dow Jones go up and down completely randomly.
Pair Corralation between Nanhua Bio and Dow Jones
Assuming the 90 days trading horizon Nanhua Bio Medicine is expected to generate 5.06 times more return on investment than Dow Jones. However, Nanhua Bio is 5.06 times more volatile than Dow Jones Industrial. It trades about 0.16 of its potential returns per unit of risk. Dow Jones Industrial is currently generating about 0.2 per unit of risk. If you would invest 791.00 in Nanhua Bio Medicine on September 8, 2024 and sell it today you would earn a total of 283.00 from holding Nanhua Bio Medicine or generate 35.78% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Together |
Strength | Significant |
Accuracy | 90.63% |
Values | Daily Returns |
Nanhua Bio Medicine vs. Dow Jones Industrial
Performance |
Timeline |
Nanhua Bio and Dow Jones Volatility Contrast
Predicted Return Density |
Returns |
Nanhua Bio Medicine
Pair trading matchups for Nanhua Bio
Dow Jones Industrial
Pair trading matchups for Dow Jones
Pair Trading with Nanhua Bio and Dow Jones
The main advantage of trading using opposite Nanhua Bio and Dow Jones positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Nanhua Bio 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.Nanhua Bio vs. Xian International Medical | Nanhua Bio vs. Guangzhou Boji Medical | Nanhua Bio vs. Nanjing Medlander Medical | Nanhua Bio vs. Maider Medical Industry |
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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 Analyst Advice module to analyst recommendations and target price estimates broken down by several categories.
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