Correlation Between Dow Jones and Semen Baturaja
Can any of the company-specific risk be diversified away by investing in both Dow Jones and Semen Baturaja 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 Semen Baturaja 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 Semen Baturaja Persero, you can compare the effects of market volatilities on Dow Jones and Semen Baturaja 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 Semen Baturaja. Check out your portfolio center. Please also check ongoing floating volatility patterns of Dow Jones and Semen Baturaja.
Diversification Opportunities for Dow Jones and Semen Baturaja
-0.63 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Dow and Semen is -0.63. Overlapping area represents the amount of risk that can be diversified away by holding Dow Jones Industrial and Semen Baturaja Persero in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Semen Baturaja Persero 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 Semen Baturaja. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Semen Baturaja Persero has no effect on the direction of Dow Jones i.e., Dow Jones and Semen Baturaja go up and down completely randomly.
Pair Corralation between Dow Jones and Semen Baturaja
Assuming the 90 days trading horizon Dow Jones Industrial is expected to generate 0.29 times more return on investment than Semen Baturaja. However, Dow Jones Industrial is 3.48 times less risky than Semen Baturaja. It trades about 0.16 of its potential returns per unit of risk. Semen Baturaja Persero is currently generating about 0.03 per unit of risk. If you would invest 3,857,103 in Dow Jones Industrial on September 1, 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 | 100.0% |
| Values | Daily Returns |
Dow Jones Industrial vs. Semen Baturaja Persero
Performance |
| Timeline |
Dow Jones and Semen Baturaja Volatility Contrast
Predicted Return Density |
| Returns |
Dow Jones Industrial
Pair trading matchups for Dow Jones
Semen Baturaja Persero
Pair trading matchups for Semen Baturaja
Pair Trading with Dow Jones and Semen Baturaja
The main advantage of trading using opposite Dow Jones and Semen Baturaja positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Dow Jones position performs unexpectedly, Semen Baturaja 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 Semen Baturaja will offset losses from the drop in Semen Baturaja's long position.| Dow Jones vs. Catalyst Pharmaceuticals | Dow Jones vs. Sphere Entertainment Co | Dow Jones vs. National CineMedia | Dow Jones vs. Mink Therapeutics |
| Semen Baturaja vs. Wijaya Karya Beton | Semen Baturaja vs. PP Properti Tbk | Semen Baturaja vs. Pembangunan Perumahan PT | Semen Baturaja vs. Waskita Karya Persero |
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 Portfolio Anywhere module to track or share privately all of your investments from the convenience of any device.
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