Correlation Between Guangdong Skychem and Dow Jones
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By analyzing existing cross correlation between Guangdong Skychem Technology and Dow Jones Industrial, you can compare the effects of market volatilities on Guangdong Skychem 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 Guangdong Skychem with a short position of Dow Jones. Check out your portfolio center. Please also check ongoing floating volatility patterns of Guangdong Skychem and Dow Jones.
Diversification Opportunities for Guangdong Skychem and Dow Jones
0.7 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Guangdong and Dow is 0.7. Overlapping area represents the amount of risk that can be diversified away by holding Guangdong Skychem Technology 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 Guangdong Skychem 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 Guangdong Skychem Technology 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 Guangdong Skychem i.e., Guangdong Skychem and Dow Jones go up and down completely randomly.
Pair Corralation between Guangdong Skychem and Dow Jones
Assuming the 90 days trading horizon Guangdong Skychem Technology is expected to generate 3.68 times more return on investment than Dow Jones. However, Guangdong Skychem is 3.68 times more volatile than Dow Jones Industrial. It trades about 0.02 of its potential returns per unit of risk. Dow Jones Industrial is currently generating about -0.3 per unit of risk. If you would invest 12,751 in Guangdong Skychem Technology on September 24, 2024 and sell it today you would earn a total of 71.00 from holding Guangdong Skychem Technology or generate 0.56% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Together |
Strength | Significant |
Accuracy | 95.24% |
Values | Daily Returns |
Guangdong Skychem Technology vs. Dow Jones Industrial
Performance |
Timeline |
Guangdong Skychem and Dow Jones Volatility Contrast
Predicted Return Density |
Returns |
Guangdong Skychem Technology
Pair trading matchups for Guangdong Skychem
Dow Jones Industrial
Pair trading matchups for Dow Jones
Pair Trading with Guangdong Skychem and Dow Jones
The main advantage of trading using opposite Guangdong Skychem and Dow Jones positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Guangdong Skychem 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.Guangdong Skychem vs. Industrial and Commercial | Guangdong Skychem vs. Kweichow Moutai Co | Guangdong Skychem vs. Agricultural Bank of | Guangdong Skychem vs. China Mobile Limited |
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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 Price Ceiling Movement module to calculate and plot Price Ceiling Movement for different equity instruments.
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