Correlation Between Astra International and Dow Jones
Can any of the company-specific risk be diversified away by investing in both Astra International 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 Astra International and Dow Jones into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Astra International Tbk and Dow Jones Industrial, you can compare the effects of market volatilities on Astra International 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 Astra International with a short position of Dow Jones. Check out your portfolio center. Please also check ongoing floating volatility patterns of Astra International and Dow Jones.
Diversification Opportunities for Astra International and Dow Jones
-0.03 | Correlation Coefficient |
Good diversification
The 3 months correlation between Astra and Dow is -0.03. Overlapping area represents the amount of risk that can be diversified away by holding Astra International Tbk 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 Astra International 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 Astra International Tbk 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 Astra International i.e., Astra International and Dow Jones go up and down completely randomly.
Pair Corralation between Astra International and Dow Jones
Assuming the 90 days trading horizon Astra International Tbk is expected to under-perform the Dow Jones. In addition to that, Astra International is 1.16 times more volatile than Dow Jones Industrial. It trades about -0.28 of its total potential returns per unit of risk. Dow Jones Industrial is currently generating about 0.19 per unit of volatility. If you would invest 4,251,495 in Dow Jones Industrial on August 24, 2024 and sell it today you would earn a total of 178,156 from holding Dow Jones Industrial or generate 4.19% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Astra International Tbk vs. Dow Jones Industrial
Performance |
| Timeline |
Astra International and Dow Jones Volatility Contrast
Predicted Return Density |
| Returns |
Astra International Tbk
Pair trading matchups for Astra International
Dow Jones Industrial
Pair trading matchups for Dow Jones
Pair Trading with Astra International and Dow Jones
The main advantage of trading using opposite Astra International and Dow Jones positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Astra International 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.| Astra International vs. Telkom Indonesia Tbk | Astra International vs. Bank Mandiri Persero | Astra International vs. Bank Central Asia | Astra International vs. PT Indofood Sukses |
| Dow Jones vs. Sphere Entertainment Co | Dow Jones vs. Perseus Mining Limited | Dow Jones vs. Titan Machinery | Dow Jones vs. Simon Property Group |
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 Options Analysis module to analyze and evaluate options and option chains as a potential hedge for your portfolios.
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