Correlation Between Dow Jones and Kalbe Farma
Can any of the company-specific risk be diversified away by investing in both Dow Jones and Kalbe Farma 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 Kalbe Farma 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 Kalbe Farma Tbk, you can compare the effects of market volatilities on Dow Jones and Kalbe Farma 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 Kalbe Farma. Check out your portfolio center. Please also check ongoing floating volatility patterns of Dow Jones and Kalbe Farma.
Diversification Opportunities for Dow Jones and Kalbe Farma
-0.71 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Dow and Kalbe is -0.71. Overlapping area represents the amount of risk that can be diversified away by holding Dow Jones Industrial and Kalbe Farma Tbk in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Kalbe Farma 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 Kalbe Farma. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Kalbe Farma Tbk has no effect on the direction of Dow Jones i.e., Dow Jones and Kalbe Farma go up and down completely randomly.
Pair Corralation between Dow Jones and Kalbe Farma
Assuming the 90 days trading horizon Dow Jones Industrial is expected to generate 0.49 times more return on investment than Kalbe Farma. However, Dow Jones Industrial is 2.06 times less risky than Kalbe Farma. It trades about 0.16 of its potential returns per unit of risk. Kalbe Farma Tbk is currently generating about 0.0 per unit of risk. If you would invest 3,857,103 in Dow Jones Industrial on August 31, 2024 and sell it today you would earn a total of 633,962 from holding Dow Jones Industrial or generate 16.44% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 99.21% |
| Values | Daily Returns |
Dow Jones Industrial vs. Kalbe Farma Tbk
Performance |
| Timeline |
Dow Jones and Kalbe Farma Volatility Contrast
Predicted Return Density |
| Returns |
Dow Jones Industrial
Pair trading matchups for Dow Jones
Kalbe Farma Tbk
Pair trading matchups for Kalbe Farma
Pair Trading with Dow Jones and Kalbe Farma
The main advantage of trading using opposite Dow Jones and Kalbe Farma positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Dow Jones position performs unexpectedly, Kalbe Farma 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 Kalbe Farma will offset losses from the drop in Kalbe Farma'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 |
| Kalbe Farma vs. PT Indofood Sukses | Kalbe Farma vs. Unilever Indonesia Tbk | Kalbe Farma vs. Semen Indonesia Persero | Kalbe Farma vs. United Tractors 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 Volatility Analysis module to get historical volatility and risk analysis based on latest market data.
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