Correlation Between Dow Jones and Agro Yasa
Can any of the company-specific risk be diversified away by investing in both Dow Jones and Agro Yasa 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 Dow Jones and Agro Yasa into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Dow Jones Industrial and Agro Yasa Lestari, you can compare the effects of market volatilities on Dow Jones and Agro Yasa 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 Dow Jones with a short position of Agro Yasa. Check out your portfolio center. Please also check ongoing floating volatility patterns of Dow Jones and Agro Yasa.
Diversification Opportunities for Dow Jones and Agro Yasa
Very good diversification
The 3 months correlation between Dow and Agro is -0.48. Overlapping area represents the amount of risk that can be diversified away by holding Dow Jones Industrial and Agro Yasa Lestari in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Agro Yasa Lestari and Dow Jones 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 Dow Jones Industrial are associated (or correlated) with Agro Yasa. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Agro Yasa Lestari has no effect on the direction of Dow Jones i.e., Dow Jones and Agro Yasa go up and down completely randomly.
Pair Corralation between Dow Jones and Agro Yasa
Assuming the 90 days trading horizon Dow Jones Industrial is expected to generate 0.15 times more return on investment than Agro Yasa. However, Dow Jones Industrial is 6.55 times less risky than Agro Yasa. It trades about -0.27 of its potential returns per unit of risk. Agro Yasa Lestari is currently generating about -0.11 per unit of risk. If you would invest 4,485,035 in Dow Jones Industrial on November 29, 2024 and sell it today you would lose (161,085) from holding Dow Jones Industrial or give up 3.59% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 95.45% |
| Values | Daily Returns |
Dow Jones Industrial vs. Agro Yasa Lestari
Performance |
| Timeline |
Dow Jones and Agro Yasa Volatility Contrast
Predicted Return Density |
| Returns |
Dow Jones Industrial
Pair trading matchups for Dow Jones
Agro Yasa Lestari
Pair trading matchups for Agro Yasa
Pair Trading with Dow Jones and Agro Yasa
The main advantage of trading using opposite Dow Jones and Agro Yasa positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Dow Jones position performs unexpectedly, Agro Yasa 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 Agro Yasa will offset losses from the drop in Agro Yasa's long position.| Dow Jones vs. Starbucks | Dow Jones vs. Westinghouse Air Brake | Dow Jones vs. Finnair Oyj | Dow Jones vs. Mesa Air Group |
| Agro Yasa vs. Sinergi Inti Plastindo | Agro Yasa vs. Bank Amar Indonesia | Agro Yasa vs. Andalan Sakti Primaindo | Agro Yasa vs. Era Mandiri Cemerlang |
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 Portfolio Anywhere module to track or share privately all of your investments from the convenience of any device.
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