Correlation Between Jinhe Biotechnology and Dow Jones
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By analyzing existing cross correlation between Jinhe Biotechnology Co and Dow Jones Industrial, you can compare the effects of market volatilities on Jinhe Biotechnology 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 Jinhe Biotechnology with a short position of Dow Jones. Check out your portfolio center. Please also check ongoing floating volatility patterns of Jinhe Biotechnology and Dow Jones.
Diversification Opportunities for Jinhe Biotechnology and Dow Jones
0.73 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Jinhe and Dow is 0.73. Overlapping area represents the amount of risk that can be diversified away by holding Jinhe Biotechnology Co 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 Jinhe Biotechnology 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 Jinhe Biotechnology Co 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 Jinhe Biotechnology i.e., Jinhe Biotechnology and Dow Jones go up and down completely randomly.
Pair Corralation between Jinhe Biotechnology and Dow Jones
Assuming the 90 days trading horizon Jinhe Biotechnology is expected to generate 1.62 times less return on investment than Dow Jones. In addition to that, Jinhe Biotechnology is 1.98 times more volatile than Dow Jones Industrial. It trades about 0.09 of its total potential returns per unit of risk. Dow Jones Industrial is currently generating about 0.29 per unit of volatility. If you would invest 4,214,154 in Dow Jones Industrial on August 31, 2024 and sell it today you would earn a total of 258,052 from holding Dow Jones Industrial or generate 6.12% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Together |
Strength | Significant |
Accuracy | 100.0% |
Values | Daily Returns |
Jinhe Biotechnology Co vs. Dow Jones Industrial
Performance |
Timeline |
Jinhe Biotechnology and Dow Jones Volatility Contrast
Predicted Return Density |
Returns |
Jinhe Biotechnology Co
Pair trading matchups for Jinhe Biotechnology
Dow Jones Industrial
Pair trading matchups for Dow Jones
Pair Trading with Jinhe Biotechnology and Dow Jones
The main advantage of trading using opposite Jinhe Biotechnology and Dow Jones positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Jinhe Biotechnology 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.Jinhe Biotechnology vs. PetroChina Co Ltd | Jinhe Biotechnology vs. China Mobile Limited | Jinhe Biotechnology vs. Ping An Insurance | Jinhe Biotechnology vs. China Petroleum Chemical |
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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 Insider Screener module to find insiders across different sectors to evaluate their impact on performance.
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