Correlation Between Sumber Energi and Dow Jones
Can any of the company-specific risk be diversified away by investing in both Sumber Energi 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 Sumber Energi and Dow Jones into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Sumber Energi Andalan and Dow Jones Industrial, you can compare the effects of market volatilities on Sumber Energi 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 Sumber Energi with a short position of Dow Jones. Check out your portfolio center. Please also check ongoing floating volatility patterns of Sumber Energi and Dow Jones.
Diversification Opportunities for Sumber Energi and Dow Jones
0.06 | Correlation Coefficient |
Significant diversification
The 3 months correlation between Sumber and Dow is 0.06. Overlapping area represents the amount of risk that can be diversified away by holding Sumber Energi Andalan 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 Sumber Energi 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 Sumber Energi Andalan 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 Sumber Energi i.e., Sumber Energi and Dow Jones go up and down completely randomly.
Pair Corralation between Sumber Energi and Dow Jones
Assuming the 90 days trading horizon Sumber Energi Andalan is expected to generate 8.08 times more return on investment than Dow Jones. However, Sumber Energi is 8.08 times more volatile than Dow Jones Industrial. It trades about 0.08 of its potential returns per unit of risk. Dow Jones Industrial is currently generating about 0.12 per unit of risk. If you would invest 39,000 in Sumber Energi Andalan on August 27, 2024 and sell it today you would earn a total of 35,500 from holding Sumber Energi Andalan or generate 91.03% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 94.35% |
| Values | Daily Returns |
Sumber Energi Andalan vs. Dow Jones Industrial
Performance |
| Timeline |
Sumber Energi and Dow Jones Volatility Contrast
Predicted Return Density |
| Returns |
Sumber Energi Andalan
Pair trading matchups for Sumber Energi
Dow Jones Industrial
Pair trading matchups for Dow Jones
Pair Trading with Sumber Energi and Dow Jones
The main advantage of trading using opposite Sumber Energi and Dow Jones positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Sumber Energi 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.| Sumber Energi vs. Intanwijaya Internasional Tbk | Sumber Energi vs. Indal Aluminium Industry | Sumber Energi vs. Inter Delta Tbk | Sumber Energi vs. Lionmesh Prima Tbk |
| Dow Jones vs. MI Homes | Dow Jones vs. Franklin Street Properties | Dow Jones vs. Summit Hotel Properties | Dow Jones vs. Portillos |
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 Fundamental Analysis module to view fundamental data based on most recent published financial statements.
Other Complementary Tools
| Efficient Frontier Plot and analyze your portfolio and positions against risk-return landscape of the market. | |
| Sectors List of equity sectors categorizing publicly traded companies based on their primary business activities | |
| Portfolio Center All portfolio management and optimization tools to improve performance of your portfolios | |
| CEOs Directory Screen CEOs from public companies around the world | |
| Bonds Directory Find actively traded corporate debentures issued by US companies |