Correlation Between Dow Jones and PT Mulia
Can any of the company-specific risk be diversified away by investing in both Dow Jones and PT Mulia 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 Mulia 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 Mulia Industrindo, you can compare the effects of market volatilities on Dow Jones and PT Mulia 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 Mulia. Check out your portfolio center. Please also check ongoing floating volatility patterns of Dow Jones and PT Mulia.
Diversification Opportunities for Dow Jones and PT Mulia
Pay attention - limited upside
The 3 months correlation between Dow and MLIA is -0.85. Overlapping area represents the amount of risk that can be diversified away by holding Dow Jones Industrial and PT Mulia Industrindo in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on PT Mulia Industrindo 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 Mulia. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of PT Mulia Industrindo has no effect on the direction of Dow Jones i.e., Dow Jones and PT Mulia go up and down completely randomly.
Pair Corralation between Dow Jones and PT Mulia
Assuming the 90 days trading horizon Dow Jones Industrial is expected to generate 0.48 times more return on investment than PT Mulia. However, Dow Jones Industrial is 2.08 times less risky than PT Mulia. It trades about 0.08 of its potential returns per unit of risk. PT Mulia Industrindo is currently generating about -0.05 per unit of risk. If you would invest 3,410,864 in Dow Jones Industrial on September 3, 2024 and sell it today you would earn a total of 1,080,201 from holding Dow Jones Industrial or generate 31.67% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Significant |
| Accuracy | 95.76% |
| Values | Daily Returns |
Dow Jones Industrial vs. PT Mulia Industrindo
Performance |
| Timeline |
Dow Jones and PT Mulia Volatility Contrast
Predicted Return Density |
| Returns |
Dow Jones Industrial
Pair trading matchups for Dow Jones
PT Mulia Industrindo
Pair trading matchups for PT Mulia
Pair Trading with Dow Jones and PT Mulia
The main advantage of trading using opposite Dow Jones and PT Mulia positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Dow Jones position performs unexpectedly, PT Mulia 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 Mulia will offset losses from the drop in PT Mulia's long position.| Dow Jones vs. Eastern Co | Dow Jones vs. Uber Technologies | Dow Jones vs. AKITA Drilling | Dow Jones vs. Chemours Co |
| PT Mulia vs. Intanwijaya Internasional Tbk | PT Mulia vs. Champion Pacific Indonesia | PT Mulia vs. Mitra Pinasthika Mustika | PT Mulia vs. Jakarta Int Hotels |
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 Top Crypto Exchanges module to search and analyze digital assets across top global cryptocurrency exchanges.
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