Correlation Between Dow Jones and MD Pictures
Can any of the company-specific risk be diversified away by investing in both Dow Jones and MD Pictures 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 MD Pictures 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 MD Pictures Tbk, you can compare the effects of market volatilities on Dow Jones and MD Pictures 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 MD Pictures. Check out your portfolio center. Please also check ongoing floating volatility patterns of Dow Jones and MD Pictures.
Diversification Opportunities for Dow Jones and MD Pictures
-0.53 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Dow and FILM is -0.53. Overlapping area represents the amount of risk that can be diversified away by holding Dow Jones Industrial and MD Pictures Tbk in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on MD Pictures 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 MD Pictures. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of MD Pictures Tbk has no effect on the direction of Dow Jones i.e., Dow Jones and MD Pictures go up and down completely randomly.
Pair Corralation between Dow Jones and MD Pictures
Assuming the 90 days trading horizon Dow Jones is expected to generate 2.44 times less return on investment than MD Pictures. But when comparing it to its historical volatility, Dow Jones Industrial is 5.05 times less risky than MD Pictures. It trades about 0.29 of its potential returns per unit of risk. MD Pictures Tbk is currently generating about 0.14 of returns per unit of risk over similar time horizon. If you would invest 313,000 in MD Pictures Tbk on August 31, 2024 and sell it today you would earn a total of 39,000 from holding MD Pictures Tbk or generate 12.46% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 95.45% |
| Values | Daily Returns |
Dow Jones Industrial vs. MD Pictures Tbk
Performance |
| Timeline |
Dow Jones and MD Pictures Volatility Contrast
Predicted Return Density |
| Returns |
Dow Jones Industrial
Pair trading matchups for Dow Jones
MD Pictures Tbk
Pair trading matchups for MD Pictures
Pair Trading with Dow Jones and MD Pictures
The main advantage of trading using opposite Dow Jones and MD Pictures positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Dow Jones position performs unexpectedly, MD Pictures 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 MD Pictures will offset losses from the drop in MD Pictures' 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 |
| MD Pictures vs. MNC Studios International | MD Pictures vs. Elang Mahkota Teknologi | MD Pictures vs. Medikaloka Hermina PT | MD Pictures vs. Surya Esa Perkasa |
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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