Correlation Between Dow Jones and Sentul City
Can any of the company-specific risk be diversified away by investing in both Dow Jones and Sentul City 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 Sentul City 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 Sentul City Tbk, you can compare the effects of market volatilities on Dow Jones and Sentul City 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 Sentul City. Check out your portfolio center. Please also check ongoing floating volatility patterns of Dow Jones and Sentul City.
Diversification Opportunities for Dow Jones and Sentul City
-0.45 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Dow and Sentul is -0.45. Overlapping area represents the amount of risk that can be diversified away by holding Dow Jones Industrial and Sentul City Tbk in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Sentul City Tbk 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 Sentul City. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Sentul City Tbk has no effect on the direction of Dow Jones i.e., Dow Jones and Sentul City go up and down completely randomly.
Pair Corralation between Dow Jones and Sentul City
Assuming the 90 days trading horizon Dow Jones is expected to generate 1.14 times less return on investment than Sentul City. But when comparing it to its historical volatility, Dow Jones Industrial is 3.44 times less risky than Sentul City. It trades about 0.16 of its potential returns per unit of risk. Sentul City Tbk is currently generating about 0.05 of returns per unit of risk over similar time horizon. If you would invest 4,200 in Sentul City Tbk on August 31, 2024 and sell it today you would earn a total of 200.00 from holding Sentul City Tbk or generate 4.76% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 97.73% |
| Values | Daily Returns |
Dow Jones Industrial vs. Sentul City Tbk
Performance |
| Timeline |
Dow Jones and Sentul City Volatility Contrast
Predicted Return Density |
| Returns |
Dow Jones Industrial
Pair trading matchups for Dow Jones
Sentul City Tbk
Pair trading matchups for Sentul City
Pair Trading with Dow Jones and Sentul City
The main advantage of trading using opposite Dow Jones and Sentul City positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Dow Jones position performs unexpectedly, Sentul City 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 Sentul City will offset losses from the drop in Sentul City's long position.| Dow Jones vs. Aerofoam Metals | Dow Jones vs. ACG Metals Limited | Dow Jones vs. China Clean Energy | Dow Jones vs. Fast Retailing Co |
| Sentul City vs. Alam Sutera Realty | Sentul City vs. Kawasan Industri Jababeka | Sentul City vs. Lippo Karawaci Tbk | Sentul City vs. Ciputra Development Tbk |
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 Global Markets Map module to get a quick overview of global market snapshot using zoomable world map. Drill down to check world indexes.
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