Correlation Between Pelat Timah and Dow Jones
Can any of the company-specific risk be diversified away by investing in both Pelat Timah 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 Pelat Timah and Dow Jones into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Pelat Timah Nusantara and Dow Jones Industrial, you can compare the effects of market volatilities on Pelat Timah 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 Pelat Timah with a short position of Dow Jones. Check out your portfolio center. Please also check ongoing floating volatility patterns of Pelat Timah and Dow Jones.
Diversification Opportunities for Pelat Timah and Dow Jones
0.21 | Correlation Coefficient |
Modest diversification
The 3 months correlation between Pelat and Dow is 0.21. Overlapping area represents the amount of risk that can be diversified away by holding Pelat Timah Nusantara 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 Pelat Timah 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 Pelat Timah Nusantara 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 Pelat Timah i.e., Pelat Timah and Dow Jones go up and down completely randomly.
Pair Corralation between Pelat Timah and Dow Jones
Assuming the 90 days trading horizon Pelat Timah Nusantara is expected to under-perform the Dow Jones. In addition to that, Pelat Timah is 5.64 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 0.2 per unit of volatility. If you would invest 4,201,159 in Dow Jones Industrial on September 3, 2024 and sell it today you would earn a total of 289,906 from holding Dow Jones Industrial or generate 6.9% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Pelat Timah Nusantara vs. Dow Jones Industrial
Performance |
| Timeline |
Pelat Timah and Dow Jones Volatility Contrast
Predicted Return Density |
| Returns |
Pelat Timah Nusantara
Pair trading matchups for Pelat Timah
Dow Jones Industrial
Pair trading matchups for Dow Jones
Pair Trading with Pelat Timah and Dow Jones
The main advantage of trading using opposite Pelat Timah and Dow Jones positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Pelat Timah 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.| Pelat Timah vs. Timah Persero Tbk | Pelat Timah vs. Semen Indonesia Persero | Pelat Timah vs. Mitra Pinasthika Mustika | Pelat Timah vs. Jakarta Int Hotels |
| Dow Jones vs. Eastern Co | Dow Jones vs. Uber Technologies | Dow Jones vs. AKITA Drilling | Dow Jones vs. Chemours 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 Equity Search module to search for actively traded equities including funds and ETFs from over 30 global markets.
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