Correlation Analysis Between Shanghai and DOW

This module allows you to analyze existing cross correlation between Shanghai and DOW. You can compare the effects of market volatilities on Shanghai and DOW 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 Shanghai with a short position of DOW. See also your portfolio center. Please also check ongoing floating volatility patterns of Shanghai and DOW.
Horizon     30 Days    Login   to change
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Comparative Performance

 Predicted Return Density 

Shanghai  vs.  DOW

 Performance (%) 

Pair Volatility

Assuming 30 trading days horizon, Shanghai is expected to under-perform the DOW. In addition to that, Shanghai is 1.89 times more volatile than DOW. It trades about -0.2 of its total potential returns per unit of risk. DOW is currently generating about -0.04 per unit of volatility. If you would invest  2,644,954  in DOW on May 17, 2019 and sell it today you would lose (37,709)  from holding DOW or give up 1.43% of portfolio value over 30 days.

Pair Corralation between Shanghai and DOW

Time Period2 Months [change]
ValuesDaily Returns

Diversification Opportunities for Shanghai and DOW

Shanghai diversification synergy

Poor diversification

Overlapping area represents the amount of risk that can be diversified away by holding Shanghai and DOW in the same portfolio assuming nothing else is changed. The correlation between historical prices or returns on DOW and Shanghai 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 Shanghai are associated (or correlated) with DOW. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of DOW has no effect on the direction of Shanghai i.e. Shanghai and DOW go up and down completely randomly.
See also your portfolio center. Please also try Positions Ratings module to determine portfolio positions ratings based on digital equity recommendations. macroaxis instant position ratings are based on combination of fundamental analysis and risk-adjusted market performance.