Correlation Between Dow Jones and Satyamitra Kemas
Can any of the company-specific risk be diversified away by investing in both Dow Jones and Satyamitra Kemas 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 Satyamitra Kemas 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 Satyamitra Kemas Lestari, you can compare the effects of market volatilities on Dow Jones and Satyamitra Kemas 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 Satyamitra Kemas. Check out your portfolio center. Please also check ongoing floating volatility patterns of Dow Jones and Satyamitra Kemas.
Diversification Opportunities for Dow Jones and Satyamitra Kemas
-0.19 | Correlation Coefficient |
Good diversification
The 3 months correlation between Dow and Satyamitra is -0.19. Overlapping area represents the amount of risk that can be diversified away by holding Dow Jones Industrial and Satyamitra Kemas Lestari in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Satyamitra Kemas Lestari 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 Satyamitra Kemas. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Satyamitra Kemas Lestari has no effect on the direction of Dow Jones i.e., Dow Jones and Satyamitra Kemas go up and down completely randomly.
Pair Corralation between Dow Jones and Satyamitra Kemas
Assuming the 90 days trading horizon Dow Jones is expected to generate 2.41 times less return on investment than Satyamitra Kemas. But when comparing it to its historical volatility, Dow Jones Industrial is 2.41 times less risky than Satyamitra Kemas. It trades about 0.1 of its potential returns per unit of risk. Satyamitra Kemas Lestari is currently generating about 0.1 of returns per unit of risk over similar time horizon. If you would invest 17,000 in Satyamitra Kemas Lestari on October 22, 2024 and sell it today you would earn a total of 500.00 from holding Satyamitra Kemas Lestari or generate 2.94% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 94.74% |
| Values | Daily Returns |
Dow Jones Industrial vs. Satyamitra Kemas Lestari
Performance |
| Timeline |
Dow Jones and Satyamitra Kemas Volatility Contrast
Predicted Return Density |
| Returns |
Dow Jones Industrial
Pair trading matchups for Dow Jones
Satyamitra Kemas Lestari
Pair trading matchups for Satyamitra Kemas
Pair Trading with Dow Jones and Satyamitra Kemas
The main advantage of trading using opposite Dow Jones and Satyamitra Kemas positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Dow Jones position performs unexpectedly, Satyamitra Kemas 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 Satyamitra Kemas will offset losses from the drop in Satyamitra Kemas' long position.| Dow Jones vs. Nasdaq Inc | Dow Jones vs. Summit Materials | Dow Jones vs. Vulcan Materials | Dow Jones vs. Celsius Holdings |
| Satyamitra Kemas vs. Saraswanti Anugerah Makmur | Satyamitra Kemas vs. Panca Budi Idaman | Satyamitra Kemas vs. Indonesia Fibreboard Industry | Satyamitra Kemas vs. Kencana Energi Lestari |
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 Alpha Finder module to use alpha and beta coefficients to find investment opportunities after accounting for the risk.
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