Correlation Between Armada Berjaya and Dow Jones
Can any of the company-specific risk be diversified away by investing in both Armada Berjaya 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 Armada Berjaya and Dow Jones into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Armada Berjaya Trans and Dow Jones Industrial, you can compare the effects of market volatilities on Armada Berjaya 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 Armada Berjaya with a short position of Dow Jones. Check out your portfolio center. Please also check ongoing floating volatility patterns of Armada Berjaya and Dow Jones.
Diversification Opportunities for Armada Berjaya and Dow Jones
-0.8 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Armada and Dow is -0.8. Overlapping area represents the amount of risk that can be diversified away by holding Armada Berjaya Trans 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 Armada Berjaya 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 Armada Berjaya Trans 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 Armada Berjaya i.e., Armada Berjaya and Dow Jones go up and down completely randomly.
Pair Corralation between Armada Berjaya and Dow Jones
Assuming the 90 days trading horizon Armada Berjaya Trans is expected to under-perform the Dow Jones. In addition to that, Armada Berjaya is 3.64 times more volatile than Dow Jones Industrial. It trades about -0.01 of its total potential returns per unit of risk. Dow Jones Industrial is currently generating about 0.12 per unit of volatility. If you would invest 3,383,361 in Dow Jones Industrial on August 31, 2024 and sell it today you would earn a total of 1,107,704 from holding Dow Jones Industrial or generate 32.74% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Significant |
| Accuracy | 95.72% |
| Values | Daily Returns |
Armada Berjaya Trans vs. Dow Jones Industrial
Performance |
| Timeline |
Armada Berjaya and Dow Jones Volatility Contrast
Predicted Return Density |
| Returns |
Armada Berjaya Trans
Pair trading matchups for Armada Berjaya
Dow Jones Industrial
Pair trading matchups for Dow Jones
Pair Trading with Armada Berjaya and Dow Jones
The main advantage of trading using opposite Armada Berjaya and Dow Jones positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Armada Berjaya 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.| Armada Berjaya vs. Guna Timur Raya | Armada Berjaya vs. Sinergi Inti Plastindo | Armada Berjaya vs. Hartadinata Abadi Tbk | Armada Berjaya vs. Weha Transportasi Indonesia |
| Dow Jones vs. Aerofoam Metals | Dow Jones vs. ACG Metals Limited | Dow Jones vs. China Clean Energy | Dow Jones vs. Fast Retailing Co |
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 Volatility Analysis module to get historical volatility and risk analysis based on latest market data.
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