Correlation Between Lingsen Precision and Dow Jones
Can any of the company-specific risk be diversified away by investing in both Lingsen Precision and Dow Jones 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 Lingsen Precision and Dow Jones into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Lingsen Precision Industries and Dow Jones Industrial, you can compare the effects of market volatilities on Lingsen Precision 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 Lingsen Precision with a short position of Dow Jones. Check out your portfolio center. Please also check ongoing floating volatility patterns of Lingsen Precision and Dow Jones.
Diversification Opportunities for Lingsen Precision and Dow Jones
-0.23 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Lingsen and Dow is -0.23. Overlapping area represents the amount of risk that can be diversified away by holding Lingsen Precision Industries 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 Lingsen Precision 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 Lingsen Precision Industries 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 Lingsen Precision i.e., Lingsen Precision and Dow Jones go up and down completely randomly.
Pair Corralation between Lingsen Precision and Dow Jones
Assuming the 90 days trading horizon Lingsen Precision Industries is expected to under-perform the Dow Jones. In addition to that, Lingsen Precision is 3.2 times more volatile than Dow Jones Industrial. It trades about -0.05 of its total potential returns per unit of risk. Dow Jones Industrial is currently generating about 0.15 per unit of volatility. If you would invest 3,886,804 in Dow Jones Industrial on September 7, 2024 and sell it today you would earn a total of 589,767 from holding Dow Jones Industrial or generate 15.17% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Against |
Strength | Insignificant |
Accuracy | 99.21% |
Values | Daily Returns |
Lingsen Precision Industries vs. Dow Jones Industrial
Performance |
Timeline |
Lingsen Precision and Dow Jones Volatility Contrast
Predicted Return Density |
Returns |
Lingsen Precision Industries
Pair trading matchups for Lingsen Precision
Dow Jones Industrial
Pair trading matchups for Dow Jones
Pair Trading with Lingsen Precision and Dow Jones
The main advantage of trading using opposite Lingsen Precision and Dow Jones positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Lingsen Precision 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.Lingsen Precision vs. Chailease Holding Co | Lingsen Precision vs. Jentech Precision Industrial | Lingsen Precision vs. Tsang Yow Industrial | Lingsen Precision vs. Uniform Industrial Corp |
Dow Jones vs. NI Holdings | Dow Jones vs. GMS Inc | Dow Jones vs. QBE Insurance Group | Dow Jones vs. Direct Line Insurance |
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 Holdings module to check your current holdings and cash postion to detemine if your portfolio needs rebalancing.
Other Complementary Tools
Correlation Analysis Reduce portfolio risk simply by holding instruments which are not perfectly correlated | |
Investing Opportunities Build portfolios using our predefined set of ideas and optimize them against your investing preferences | |
Risk-Return Analysis View associations between returns expected from investment and the risk you assume | |
Analyst Advice Analyst recommendations and target price estimates broken down by several categories | |
Performance Analysis Check effects of mean-variance optimization against your current asset allocation |