Correlation Between Yunnan Chuangxin and Dow Jones
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By analyzing existing cross correlation between Yunnan Chuangxin New and Dow Jones Industrial, you can compare the effects of market volatilities on Yunnan Chuangxin 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 Yunnan Chuangxin with a short position of Dow Jones. Check out your portfolio center. Please also check ongoing floating volatility patterns of Yunnan Chuangxin and Dow Jones.
Diversification Opportunities for Yunnan Chuangxin and Dow Jones
0.6 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Yunnan and Dow is 0.6. Overlapping area represents the amount of risk that can be diversified away by holding Yunnan Chuangxin New 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 Yunnan Chuangxin 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 Yunnan Chuangxin New 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 Yunnan Chuangxin i.e., Yunnan Chuangxin and Dow Jones go up and down completely randomly.
Pair Corralation between Yunnan Chuangxin and Dow Jones
Assuming the 90 days trading horizon Yunnan Chuangxin New is expected to generate 4.86 times more return on investment than Dow Jones. However, Yunnan Chuangxin is 4.86 times more volatile than Dow Jones Industrial. It trades about 0.12 of its potential returns per unit of risk. Dow Jones Industrial is currently generating about 0.03 per unit of risk. If you would invest 2,667 in Yunnan Chuangxin New on September 24, 2024 and sell it today you would earn a total of 710.00 from holding Yunnan Chuangxin New or generate 26.62% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Together |
Strength | Significant |
Accuracy | 93.75% |
Values | Daily Returns |
Yunnan Chuangxin New vs. Dow Jones Industrial
Performance |
Timeline |
Yunnan Chuangxin and Dow Jones Volatility Contrast
Predicted Return Density |
Returns |
Yunnan Chuangxin New
Pair trading matchups for Yunnan Chuangxin
Dow Jones Industrial
Pair trading matchups for Dow Jones
Pair Trading with Yunnan Chuangxin and Dow Jones
The main advantage of trading using opposite Yunnan Chuangxin and Dow Jones positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Yunnan Chuangxin 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.Yunnan Chuangxin vs. Zijin Mining Group | Yunnan Chuangxin vs. Wanhua Chemical Group | Yunnan Chuangxin vs. Baoshan Iron Steel | Yunnan Chuangxin vs. Shandong Gold Mining |
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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 Portfolio Backtesting module to avoid under-diversification and over-optimization by backtesting your portfolios.
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