Correlation Between PT Indosat and Dow Jones
Can any of the company-specific risk be diversified away by investing in both PT Indosat and Dow Jones 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 PT Indosat and Dow Jones into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between PT Indosat Tbk and Dow Jones Industrial, you can compare the effects of market volatilities on PT Indosat and Dow Jones 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 PT Indosat with a short position of Dow Jones. Check out your portfolio center. Please also check ongoing floating volatility patterns of PT Indosat and Dow Jones.
Diversification Opportunities for PT Indosat and Dow Jones
-0.6 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between IDO1 and Dow is -0.6. Overlapping area represents the amount of risk that can be diversified away by holding PT Indosat Tbk and Dow Jones Industrial in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Dow Jones Industrial and PT Indosat 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 PT Indosat Tbk are associated (or correlated) with Dow Jones. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Dow Jones Industrial has no effect on the direction of PT Indosat i.e., PT Indosat and Dow Jones go up and down completely randomly.
Pair Corralation between PT Indosat and Dow Jones
Assuming the 90 days trading horizon PT Indosat Tbk is expected to generate 19.17 times more return on investment than Dow Jones. However, PT Indosat is 19.17 times more volatile than Dow Jones Industrial. It trades about 0.04 of its potential returns per unit of risk. Dow Jones Industrial is currently generating about 0.08 per unit of risk. If you would invest 8.20 in PT Indosat Tbk on September 2, 2024 and sell it today you would earn a total of 3.80 from holding PT Indosat Tbk or generate 46.34% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 98.02% |
| Values | Daily Returns |
PT Indosat Tbk vs. Dow Jones Industrial
Performance |
| Timeline |
PT Indosat and Dow Jones Volatility Contrast
Predicted Return Density |
| Returns |
PT Indosat Tbk
Pair trading matchups for PT Indosat
Dow Jones Industrial
Pair trading matchups for Dow Jones
Pair Trading with PT Indosat and Dow Jones
The main advantage of trading using opposite PT Indosat and Dow Jones positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if PT Indosat position performs unexpectedly, Dow Jones 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 Dow Jones will offset losses from the drop in Dow Jones' long position.| PT Indosat vs. MARKET VECTR RETAIL | PT Indosat vs. CARSALESCOM | PT Indosat vs. FLOW TRADERS LTD | PT Indosat vs. Reinsurance Group of |
| Dow Jones vs. Dream Finders Homes | Dow Jones vs. GEN Restaurant Group, | Dow Jones vs. National Beverage Corp | Dow Jones vs. BJs Restaurants |
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 Competition Analyzer module to analyze and compare many basic indicators for a group of related or unrelated entities.
Other Complementary Tools
| Idea Breakdown Analyze constituents of all Macroaxis ideas. Macroaxis investment ideas are predefined, sector-focused investing themes | |
| Portfolio File Import Quickly import all of your third-party portfolios from your local drive in csv format | |
| Portfolio Holdings Check your current holdings and cash postion to detemine if your portfolio needs rebalancing | |
| Bond Analysis Evaluate and analyze corporate bonds as a potential investment for your portfolios. | |
| Commodity Directory Find actively traded commodities issued by global exchanges |