Correlation Between Aneka Tambang and Dow Jones
Can any of the company-specific risk be diversified away by investing in both Aneka Tambang 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 Aneka Tambang and Dow Jones into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Aneka Tambang Tbk and Dow Jones Industrial, you can compare the effects of market volatilities on Aneka Tambang 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 Aneka Tambang with a short position of Dow Jones. Check out your portfolio center. Please also check ongoing floating volatility patterns of Aneka Tambang and Dow Jones.
Diversification Opportunities for Aneka Tambang and Dow Jones
-0.81 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Aneka and Dow is -0.81. Overlapping area represents the amount of risk that can be diversified away by holding Aneka Tambang 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 Aneka Tambang 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 Aneka Tambang 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 Aneka Tambang i.e., Aneka Tambang and Dow Jones go up and down completely randomly.
Pair Corralation between Aneka Tambang and Dow Jones
Assuming the 90 days trading horizon Aneka Tambang Tbk is expected to under-perform the Dow Jones. In addition to that, Aneka Tambang is 1.73 times more volatile than Dow Jones Industrial. It trades about -0.08 of its total potential returns per unit of risk. Dow Jones Industrial is currently generating about 0.16 per unit of volatility. If you would invest 3,292,896 in Dow Jones Industrial on August 25, 2024 and sell it today you would earn a total of 1,136,755 from holding Dow Jones Industrial or generate 34.52% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Significant |
| Accuracy | 99.63% |
| Values | Daily Returns |
Aneka Tambang Tbk vs. Dow Jones Industrial
Performance |
| Timeline |
Aneka Tambang and Dow Jones Volatility Contrast
Predicted Return Density |
| Returns |
Aneka Tambang Tbk
Pair trading matchups for Aneka Tambang
Dow Jones Industrial
Pair trading matchups for Dow Jones
Pair Trading with Aneka Tambang and Dow Jones
The main advantage of trading using opposite Aneka Tambang and Dow Jones positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Aneka Tambang 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.| Aneka Tambang vs. Event Hospitality and | Aneka Tambang vs. Gold Road Resources | Aneka Tambang vs. Treasury Wine Estates | Aneka Tambang vs. Apiam Animal Health |
| Dow Jones vs. Vistra Energy Corp | Dow Jones vs. Fluence Energy | Dow Jones vs. Old Republic International | Dow Jones vs. Empresa Distribuidora y |
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 Content Syndication module to quickly integrate customizable finance content to your own investment portal.
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