Correlation Between Dow Jones and PT Klinko
Can any of the company-specific risk be diversified away by investing in both Dow Jones and PT Klinko 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 PT Klinko 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 PT Klinko Karya, you can compare the effects of market volatilities on Dow Jones and PT Klinko 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 PT Klinko. Check out your portfolio center. Please also check ongoing floating volatility patterns of Dow Jones and PT Klinko.
Diversification Opportunities for Dow Jones and PT Klinko
Poor diversification
The 3 months correlation between Dow and KLIN is 0.77. Overlapping area represents the amount of risk that can be diversified away by holding Dow Jones Industrial and PT Klinko Karya in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on PT Klinko Karya 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 PT Klinko. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of PT Klinko Karya has no effect on the direction of Dow Jones i.e., Dow Jones and PT Klinko go up and down completely randomly.
Pair Corralation between Dow Jones and PT Klinko
Assuming the 90 days trading horizon Dow Jones is expected to generate 20.5 times less return on investment than PT Klinko. But when comparing it to its historical volatility, Dow Jones Industrial is 7.52 times less risky than PT Klinko. It trades about 0.1 of its potential returns per unit of risk. PT Klinko Karya is currently generating about 0.26 of returns per unit of risk over similar time horizon. If you would invest 2,000 in PT Klinko Karya on August 27, 2024 and sell it today you would earn a total of 17,400 from holding PT Klinko Karya or generate 870.0% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 94.15% |
| Values | Daily Returns |
Dow Jones Industrial vs. PT Klinko Karya
Performance |
| Timeline |
Dow Jones and PT Klinko Volatility Contrast
Predicted Return Density |
| Returns |
Dow Jones Industrial
Pair trading matchups for Dow Jones
PT Klinko Karya
Pair trading matchups for PT Klinko
Pair Trading with Dow Jones and PT Klinko
The main advantage of trading using opposite Dow Jones and PT Klinko positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Dow Jones position performs unexpectedly, PT Klinko 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 PT Klinko will offset losses from the drop in PT Klinko's long position.| Dow Jones vs. MI Homes | Dow Jones vs. Franklin Street Properties | Dow Jones vs. Summit Hotel Properties | Dow Jones vs. Portillos |
| PT Klinko vs. Bangun Karya Perkasa | PT Klinko vs. PT Kusuma Kemindo | PT Klinko vs. PT Hetzer Medical | PT Klinko vs. PT Rohartindo Nusantara |
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 Fundamentals Comparison module to compare fundamentals across multiple equities to find investing opportunities.
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