Correlation Between Dow Jones and Meta Epsi
Can any of the company-specific risk be diversified away by investing in both Dow Jones and Meta Epsi 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 Meta Epsi 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 Meta Epsi Tbk, you can compare the effects of market volatilities on Dow Jones and Meta Epsi 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 Meta Epsi. Check out your portfolio center. Please also check ongoing floating volatility patterns of Dow Jones and Meta Epsi.
Diversification Opportunities for Dow Jones and Meta Epsi
Pay attention - limited upside
The 3 months correlation between Dow and Meta is -0.85. Overlapping area represents the amount of risk that can be diversified away by holding Dow Jones Industrial and Meta Epsi Tbk in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Meta Epsi 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 Meta Epsi. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Meta Epsi Tbk has no effect on the direction of Dow Jones i.e., Dow Jones and Meta Epsi go up and down completely randomly.
Pair Corralation between Dow Jones and Meta Epsi
Assuming the 90 days trading horizon Dow Jones Industrial is expected to generate 0.21 times more return on investment than Meta Epsi. However, Dow Jones Industrial is 4.75 times less risky than Meta Epsi. It trades about 0.37 of its potential returns per unit of risk. Meta Epsi Tbk is currently generating about -0.22 per unit of risk. If you would invest 4,179,460 in Dow Jones Industrial on September 4, 2024 and sell it today you would earn a total of 298,740 from holding Dow Jones Industrial or generate 7.15% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Dow Jones Industrial vs. Meta Epsi Tbk
Performance |
| Timeline |
Dow Jones and Meta Epsi Volatility Contrast
Predicted Return Density |
| Returns |
Dow Jones Industrial
Pair trading matchups for Dow Jones
Meta Epsi Tbk
Pair trading matchups for Meta Epsi
Pair Trading with Dow Jones and Meta Epsi
The main advantage of trading using opposite Dow Jones and Meta Epsi positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Dow Jones position performs unexpectedly, Meta Epsi 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 Meta Epsi will offset losses from the drop in Meta Epsi's long position.| Dow Jones vs. Gentex | Dow Jones vs. American Axle Manufacturing | Dow Jones vs. Pearson PLC ADR | Dow Jones vs. Marine Products |
| Meta Epsi vs. PT Hetzer Medical | Meta Epsi vs. PT Dewi Shri | Meta Epsi vs. PT Sari Kreasi | Meta Epsi vs. Gaya Abadi Sempurna |
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 Watchlist Optimization module to optimize watchlists to build efficient portfolios or rebalance existing positions based on the mean-variance optimization algorithm.
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