Correlation Between Andalan Sakti and Dow Jones
Can any of the company-specific risk be diversified away by investing in both Andalan Sakti 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 Andalan Sakti and Dow Jones into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Andalan Sakti Primaindo and Dow Jones Industrial, you can compare the effects of market volatilities on Andalan Sakti 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 Andalan Sakti with a short position of Dow Jones. Check out your portfolio center. Please also check ongoing floating volatility patterns of Andalan Sakti and Dow Jones.
Diversification Opportunities for Andalan Sakti and Dow Jones
-0.83 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Andalan and Dow is -0.83. Overlapping area represents the amount of risk that can be diversified away by holding Andalan Sakti Primaindo 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 Andalan Sakti 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 Andalan Sakti Primaindo 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 Andalan Sakti i.e., Andalan Sakti and Dow Jones go up and down completely randomly.
Pair Corralation between Andalan Sakti and Dow Jones
Assuming the 90 days trading horizon Andalan Sakti Primaindo is expected to generate 6.09 times more return on investment than Dow Jones. However, Andalan Sakti is 6.09 times more volatile than Dow Jones Industrial. It trades about 0.03 of its potential returns per unit of risk. Dow Jones Industrial is currently generating about 0.12 per unit of risk. If you would invest 15,700 in Andalan Sakti Primaindo on August 31, 2024 and sell it today you would earn a total of 1,800 from holding Andalan Sakti Primaindo or generate 11.46% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Significant |
| Accuracy | 95.72% |
| Values | Daily Returns |
Andalan Sakti Primaindo vs. Dow Jones Industrial
Performance |
| Timeline |
Andalan Sakti and Dow Jones Volatility Contrast
Predicted Return Density |
| Returns |
Andalan Sakti Primaindo
Pair trading matchups for Andalan Sakti
Dow Jones Industrial
Pair trading matchups for Dow Jones
Pair Trading with Andalan Sakti and Dow Jones
The main advantage of trading using opposite Andalan Sakti and Dow Jones positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Andalan Sakti 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.| Andalan Sakti vs. Bumi Benowo Sukses | Andalan Sakti vs. Makmur Berkah Amanda | Andalan Sakti vs. Royalindo Investa Wijaya | Andalan Sakti vs. Cahayaputra Asa Keramik |
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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 Directory module to find actively traded commodities issued by global exchanges.
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