Correlation Between Dow Jones and Solusi Sinergi
Can any of the company-specific risk be diversified away by investing in both Dow Jones and Solusi Sinergi 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 Solusi Sinergi 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 Solusi Sinergi Digital, you can compare the effects of market volatilities on Dow Jones and Solusi Sinergi 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 Solusi Sinergi. Check out your portfolio center. Please also check ongoing floating volatility patterns of Dow Jones and Solusi Sinergi.
Diversification Opportunities for Dow Jones and Solusi Sinergi
0.76 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Dow and Solusi is 0.76. Overlapping area represents the amount of risk that can be diversified away by holding Dow Jones Industrial and Solusi Sinergi Digital in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Solusi Sinergi Digital 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 Solusi Sinergi. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Solusi Sinergi Digital has no effect on the direction of Dow Jones i.e., Dow Jones and Solusi Sinergi go up and down completely randomly.
Pair Corralation between Dow Jones and Solusi Sinergi
Assuming the 90 days trading horizon Dow Jones is expected to generate 3.9 times less return on investment than Solusi Sinergi. But when comparing it to its historical volatility, Dow Jones Industrial is 4.9 times less risky than Solusi Sinergi. It trades about 0.11 of its potential returns per unit of risk. Solusi Sinergi Digital is currently generating about 0.09 of returns per unit of risk over similar time horizon. If you would invest 18,880 in Solusi Sinergi Digital on September 12, 2024 and sell it today you would earn a total of 22,920 from holding Solusi Sinergi Digital or generate 121.4% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 96.36% |
| Values | Daily Returns |
Dow Jones Industrial vs. Solusi Sinergi Digital
Performance |
| Timeline |
Dow Jones and Solusi Sinergi Volatility Contrast
Predicted Return Density |
| Returns |
Dow Jones Industrial
Pair trading matchups for Dow Jones
Solusi Sinergi Digital
Pair trading matchups for Solusi Sinergi
Pair Trading with Dow Jones and Solusi Sinergi
The main advantage of trading using opposite Dow Jones and Solusi Sinergi positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Dow Jones position performs unexpectedly, Solusi Sinergi 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 Solusi Sinergi will offset losses from the drop in Solusi Sinergi's long position.| Dow Jones vs. Aeye Inc | Dow Jones vs. Gentex | Dow Jones vs. Marine Products | Dow Jones vs. CarsalesCom Ltd ADR |
| Solusi Sinergi vs. DCI Indonesia Tbk | Solusi Sinergi vs. Digital Mediatama Maxima | Solusi Sinergi vs. Multipolar Technology Tbk | Solusi Sinergi vs. Bank Net Indonesia |
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 Price Ceiling Movement module to calculate and plot Price Ceiling Movement for different equity instruments.
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