Correlation Between Dow Jones and Media Nusantara
Can any of the company-specific risk be diversified away by investing in both Dow Jones and Media Nusantara 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 Media Nusantara 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 Media Nusantara Citra, you can compare the effects of market volatilities on Dow Jones and Media Nusantara 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 Media Nusantara. Check out your portfolio center. Please also check ongoing floating volatility patterns of Dow Jones and Media Nusantara.
Diversification Opportunities for Dow Jones and Media Nusantara
-0.67 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Dow and Media is -0.67. Overlapping area represents the amount of risk that can be diversified away by holding Dow Jones Industrial and Media Nusantara Citra in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Media Nusantara Citra 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 Media Nusantara. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Media Nusantara Citra has no effect on the direction of Dow Jones i.e., Dow Jones and Media Nusantara go up and down completely randomly.
Pair Corralation between Dow Jones and Media Nusantara
Assuming the 90 days trading horizon Dow Jones Industrial is expected to generate 1.17 times more return on investment than Media Nusantara. However, Dow Jones is 1.17 times more volatile than Media Nusantara Citra. It trades about 0.16 of its potential returns per unit of risk. Media Nusantara Citra is currently generating about -0.09 per unit of risk. If you would invest 3,880,733 in Dow Jones Industrial on September 3, 2024 and sell it today you would earn a total of 610,332 from holding Dow Jones Industrial or generate 15.73% 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. Media Nusantara Citra
Performance |
| Timeline |
Dow Jones and Media Nusantara Volatility Contrast
Predicted Return Density |
| Returns |
Dow Jones Industrial
Pair trading matchups for Dow Jones
Media Nusantara Citra
Pair trading matchups for Media Nusantara
Pair Trading with Dow Jones and Media Nusantara
The main advantage of trading using opposite Dow Jones and Media Nusantara positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Dow Jones position performs unexpectedly, Media Nusantara 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 Media Nusantara will offset losses from the drop in Media Nusantara's long position.| Dow Jones vs. Eastern Co | Dow Jones vs. Uber Technologies | Dow Jones vs. AKITA Drilling | Dow Jones vs. Chemours Co |
| Media Nusantara vs. Kontoor Brands | Media Nusantara vs. Arrow Financial | Media Nusantara vs. Univest Pennsylvania | Media Nusantara vs. KeyCorp |
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 Odds Of Bankruptcy module to get analysis of equity chance of financial distress in the next 2 years.
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