Correlation Between Bank Windu and Dow Jones
Can any of the company-specific risk be diversified away by investing in both Bank Windu 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 Bank Windu and Dow Jones into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Bank Windu Kentjana and Dow Jones Industrial, you can compare the effects of market volatilities on Bank Windu 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 Bank Windu with a short position of Dow Jones. Check out your portfolio center. Please also check ongoing floating volatility patterns of Bank Windu and Dow Jones.
Diversification Opportunities for Bank Windu and Dow Jones
0.1 | Correlation Coefficient |
Average diversification
The 3 months correlation between Bank and Dow is 0.1. Overlapping area represents the amount of risk that can be diversified away by holding Bank Windu Kentjana 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 Bank Windu 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 Bank Windu Kentjana 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 Bank Windu i.e., Bank Windu and Dow Jones go up and down completely randomly.
Pair Corralation between Bank Windu and Dow Jones
Assuming the 90 days trading horizon Bank Windu Kentjana is expected to under-perform the Dow Jones. In addition to that, Bank Windu is 2.24 times more volatile than Dow Jones Industrial. It trades about 0.0 of its total potential returns per unit of risk. Dow Jones Industrial is currently generating about 0.08 per unit of volatility. If you would invest 3,405,394 in Dow Jones Industrial on October 24, 2024 and sell it today you would earn a total of 1,010,279 from holding Dow Jones Industrial or generate 29.67% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 94.95% |
| Values | Daily Returns |
Bank Windu Kentjana vs. Dow Jones Industrial
Performance |
| Timeline |
Bank Windu and Dow Jones Volatility Contrast
Predicted Return Density |
| Returns |
Bank Windu Kentjana
Pair trading matchups for Bank Windu
Dow Jones Industrial
Pair trading matchups for Dow Jones
Pair Trading with Bank Windu and Dow Jones
The main advantage of trading using opposite Bank Windu and Dow Jones positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Bank Windu 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.| Bank Windu vs. Bank Mayapada Internasional | Bank Windu vs. Bank Artha Graha | Bank Windu vs. Bank Pembangunan Daerah | Bank Windu vs. Bank Mega Tbk |
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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 Portfolio Diagnostics module to use generated alerts and portfolio events aggregator to diagnose current holdings.
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