Correlation Between INDO TAMBANGRAYA and Dow Jones
Can any of the company-specific risk be diversified away by investing in both INDO TAMBANGRAYA 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 INDO TAMBANGRAYA and Dow Jones into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between INDO TAMBANGRAYA MG and Dow Jones Industrial, you can compare the effects of market volatilities on INDO TAMBANGRAYA 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 INDO TAMBANGRAYA with a short position of Dow Jones. Check out your portfolio center. Please also check ongoing floating volatility patterns of INDO TAMBANGRAYA and Dow Jones.
Diversification Opportunities for INDO TAMBANGRAYA and Dow Jones
0.5 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between INDO and Dow is 0.5. Overlapping area represents the amount of risk that can be diversified away by holding INDO TAMBANGRAYA MG 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 INDO TAMBANGRAYA 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 INDO TAMBANGRAYA MG 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 INDO TAMBANGRAYA i.e., INDO TAMBANGRAYA and Dow Jones go up and down completely randomly.
Pair Corralation between INDO TAMBANGRAYA and Dow Jones
Assuming the 90 days trading horizon INDO TAMBANGRAYA MG is expected to generate 2.96 times more return on investment than Dow Jones. However, INDO TAMBANGRAYA is 2.96 times more volatile than Dow Jones Industrial. It trades about 0.05 of its potential returns per unit of risk. Dow Jones Industrial is currently generating about 0.14 per unit of risk. If you would invest 149.00 in INDO TAMBANGRAYA MG on September 3, 2024 and sell it today you would earn a total of 19.00 from holding INDO TAMBANGRAYA MG or generate 12.75% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 96.69% |
| Values | Daily Returns |
INDO TAMBANGRAYA MG vs. Dow Jones Industrial
Performance |
| Timeline |
INDO TAMBANGRAYA and Dow Jones Volatility Contrast
Predicted Return Density |
| Returns |
INDO TAMBANGRAYA MG
Pair trading matchups for INDO TAMBANGRAYA
Dow Jones Industrial
Pair trading matchups for Dow Jones
Pair Trading with INDO TAMBANGRAYA and Dow Jones
The main advantage of trading using opposite INDO TAMBANGRAYA and Dow Jones positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if INDO TAMBANGRAYA 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.| INDO TAMBANGRAYA vs. Sqs Software Quality | INDO TAMBANGRAYA vs. NAKED WINES PLC | INDO TAMBANGRAYA vs. Pembina Pipeline Corp | INDO TAMBANGRAYA vs. Alfa Financial Software |
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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 Commodity Channel module to use Commodity Channel Index to analyze current equity momentum.
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