Correlation Between Dow Jones and Berkah Prima
Can any of the company-specific risk be diversified away by investing in both Dow Jones and Berkah Prima 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 Berkah Prima 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 Berkah Prima Perkasa, you can compare the effects of market volatilities on Dow Jones and Berkah Prima 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 Berkah Prima. Check out your portfolio center. Please also check ongoing floating volatility patterns of Dow Jones and Berkah Prima.
Diversification Opportunities for Dow Jones and Berkah Prima
-0.28 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Dow and Berkah is -0.28. Overlapping area represents the amount of risk that can be diversified away by holding Dow Jones Industrial and Berkah Prima Perkasa in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Berkah Prima Perkasa 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 Berkah Prima. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Berkah Prima Perkasa has no effect on the direction of Dow Jones i.e., Dow Jones and Berkah Prima go up and down completely randomly.
Pair Corralation between Dow Jones and Berkah Prima
Assuming the 90 days trading horizon Dow Jones is expected to generate 1.14 times less return on investment than Berkah Prima. But when comparing it to its historical volatility, Dow Jones Industrial is 3.03 times less risky than Berkah Prima. It trades about 0.09 of its potential returns per unit of risk. Berkah Prima Perkasa is currently generating about 0.03 of returns per unit of risk over similar time horizon. If you would invest 24,931 in Berkah Prima Perkasa on November 28, 2024 and sell it today you would earn a total of 6,669 from holding Berkah Prima Perkasa or generate 26.75% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 94.53% |
| Values | Daily Returns |
Dow Jones Industrial vs. Berkah Prima Perkasa
Performance |
| Timeline |
Dow Jones and Berkah Prima Volatility Contrast
Predicted Return Density |
| Returns |
Dow Jones Industrial
Pair trading matchups for Dow Jones
Berkah Prima Perkasa
Pair trading matchups for Berkah Prima
Pair Trading with Dow Jones and Berkah Prima
The main advantage of trading using opposite Dow Jones and Berkah Prima positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Dow Jones position performs unexpectedly, Berkah Prima 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 Berkah Prima will offset losses from the drop in Berkah Prima's long position.| Dow Jones vs. Gladstone Investment | Dow Jones vs. BW Offshore Limited | Dow Jones vs. Fidus Investment Corp | Dow Jones vs. Aperture Health |
| Berkah Prima vs. Communication Cable Systems | Berkah Prima vs. Hensel Davest Indonesia | Berkah Prima vs. Arita Prima Indonesia | Berkah Prima vs. Trisula Textile Industries |
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 Price Transformation module to use Price Transformation models to analyze the depth of different equity instruments across global markets.
Other Complementary Tools
| Theme Ratings Determine theme ratings based on digital equity recommendations. Macroaxis theme ratings are based on combination of fundamental analysis and risk-adjusted market performance | |
| Premium Stories Follow Macroaxis premium stories from verified contributors across different equity types, categories and coverage scope | |
| Money Flow Index Determine momentum by analyzing Money Flow Index and other technical indicators | |
| Cryptocurrency Center Build and monitor diversified portfolio of extremely risky digital assets and cryptocurrency | |
| Fundamental Analysis View fundamental data based on most recent published financial statements |