Correlation Between Dow Jones and Duta Pertiwi
Can any of the company-specific risk be diversified away by investing in both Dow Jones and Duta Pertiwi 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 Duta Pertiwi 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 Duta Pertiwi Tbk, you can compare the effects of market volatilities on Dow Jones and Duta Pertiwi 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 Duta Pertiwi. Check out your portfolio center. Please also check ongoing floating volatility patterns of Dow Jones and Duta Pertiwi.
Diversification Opportunities for Dow Jones and Duta Pertiwi
0.78 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Dow and Duta is 0.78. Overlapping area represents the amount of risk that can be diversified away by holding Dow Jones Industrial and Duta Pertiwi Tbk in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Duta Pertiwi 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 Duta Pertiwi. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Duta Pertiwi Tbk has no effect on the direction of Dow Jones i.e., Dow Jones and Duta Pertiwi go up and down completely randomly.
Pair Corralation between Dow Jones and Duta Pertiwi
Assuming the 90 days trading horizon Dow Jones Industrial is expected to generate 0.36 times more return on investment than Duta Pertiwi. However, Dow Jones Industrial is 2.8 times less risky than Duta Pertiwi. It trades about 0.08 of its potential returns per unit of risk. Duta Pertiwi Tbk is currently generating about 0.02 per unit of risk. If you would invest 3,359,634 in Dow Jones Industrial on August 27, 2024 and sell it today you would earn a total of 1,070,017 from holding Dow Jones Industrial or generate 31.85% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Together |
Strength | Significant |
Accuracy | 95.56% |
Values | Daily Returns |
Dow Jones Industrial vs. Duta Pertiwi Tbk
Performance |
Timeline |
Dow Jones and Duta Pertiwi Volatility Contrast
Predicted Return Density |
Returns |
Dow Jones Industrial
Pair trading matchups for Dow Jones
Duta Pertiwi Tbk
Pair trading matchups for Duta Pertiwi
Pair Trading with Dow Jones and Duta Pertiwi
The main advantage of trading using opposite Dow Jones and Duta Pertiwi positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Dow Jones position performs unexpectedly, Duta Pertiwi 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 Duta Pertiwi will offset losses from the drop in Duta Pertiwi's long position.Dow Jones vs. Meiwu Technology Co | Dow Jones vs. 17 Education Technology | Dow Jones vs. 51Talk Online Education | Dow Jones vs. Afya |
Duta Pertiwi vs. Duta Anggada Realty | Duta Pertiwi vs. Intiland Development Tbk | Duta Pertiwi vs. Bhuwanatala Indah Permai | Duta Pertiwi vs. Fortune Mate Indonesia |
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 USA ETFs module to find actively traded Exchange Traded Funds (ETF) in USA.
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