Correlation Between Dow Jones and Zhejiang Huatong
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By analyzing existing cross correlation between Dow Jones Industrial and Zhejiang Huatong Meat, you can compare the effects of market volatilities on Dow Jones and Zhejiang Huatong 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 Dow Jones with a short position of Zhejiang Huatong. Check out your portfolio center. Please also check ongoing floating volatility patterns of Dow Jones and Zhejiang Huatong.
Diversification Opportunities for Dow Jones and Zhejiang Huatong
0.68 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Dow and Zhejiang is 0.68. Overlapping area represents the amount of risk that can be diversified away by holding Dow Jones Industrial and Zhejiang Huatong Meat in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Zhejiang Huatong Meat and Dow Jones 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 Dow Jones Industrial are associated (or correlated) with Zhejiang Huatong. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Zhejiang Huatong Meat has no effect on the direction of Dow Jones i.e., Dow Jones and Zhejiang Huatong go up and down completely randomly.
Pair Corralation between Dow Jones and Zhejiang Huatong
Assuming the 90 days trading horizon Dow Jones is expected to generate 6.18 times less return on investment than Zhejiang Huatong. But when comparing it to its historical volatility, Dow Jones Industrial is 4.59 times less risky than Zhejiang Huatong. It trades about 0.06 of its potential returns per unit of risk. Zhejiang Huatong Meat is currently generating about 0.07 of returns per unit of risk over similar time horizon. If you would invest 1,145 in Zhejiang Huatong Meat on September 26, 2024 and sell it today you would earn a total of 151.00 from holding Zhejiang Huatong Meat or generate 13.19% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Together |
Strength | Significant |
Accuracy | 93.65% |
Values | Daily Returns |
Dow Jones Industrial vs. Zhejiang Huatong Meat
Performance |
Timeline |
Dow Jones and Zhejiang Huatong Volatility Contrast
Predicted Return Density |
Returns |
Dow Jones Industrial
Pair trading matchups for Dow Jones
Zhejiang Huatong Meat
Pair trading matchups for Zhejiang Huatong
Pair Trading with Dow Jones and Zhejiang Huatong
The main advantage of trading using opposite Dow Jones and Zhejiang Huatong positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Dow Jones position performs unexpectedly, Zhejiang Huatong 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 Zhejiang Huatong will offset losses from the drop in Zhejiang Huatong's long position.Dow Jones vs. Sabre Corpo | Dow Jones vs. Cannae Holdings | Dow Jones vs. Pekin Life Insurance | Dow Jones vs. Supercom |
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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 Fundamentals Comparison module to compare fundamentals across multiple equities to find investing opportunities.
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