Correlation Between Bank Nationalnobu and Dow Jones
Can any of the company-specific risk be diversified away by investing in both Bank Nationalnobu 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 Nationalnobu 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 Nationalnobu Tbk and Dow Jones Industrial, you can compare the effects of market volatilities on Bank Nationalnobu 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 Nationalnobu with a short position of Dow Jones. Check out your portfolio center. Please also check ongoing floating volatility patterns of Bank Nationalnobu and Dow Jones.
Diversification Opportunities for Bank Nationalnobu and Dow Jones
0.65 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Bank and Dow is 0.65. Overlapping area represents the amount of risk that can be diversified away by holding Bank Nationalnobu 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 Bank Nationalnobu 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 Nationalnobu 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 Bank Nationalnobu i.e., Bank Nationalnobu and Dow Jones go up and down completely randomly.
Pair Corralation between Bank Nationalnobu and Dow Jones
Assuming the 90 days trading horizon Bank Nationalnobu Tbk is expected to under-perform the Dow Jones. In addition to that, Bank Nationalnobu is 1.82 times more volatile than Dow Jones Industrial. It trades about -0.05 of its total potential returns per unit of risk. Dow Jones Industrial is currently generating about 0.24 per unit of volatility. If you would invest 4,211,440 in Dow Jones Industrial on August 26, 2024 and sell it today you would earn a total of 218,211 from holding Dow Jones Industrial or generate 5.18% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Bank Nationalnobu Tbk vs. Dow Jones Industrial
Performance |
| Timeline |
Bank Nationalnobu and Dow Jones Volatility Contrast
Predicted Return Density |
| Returns |
Bank Nationalnobu Tbk
Pair trading matchups for Bank Nationalnobu
Dow Jones Industrial
Pair trading matchups for Dow Jones
Pair Trading with Bank Nationalnobu and Dow Jones
The main advantage of trading using opposite Bank Nationalnobu and Dow Jones positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Bank Nationalnobu 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 Nationalnobu vs. Paninvest Tbk | Bank Nationalnobu vs. Panin Sekuritas Tbk | Bank Nationalnobu vs. Wahana Ottomitra Multiartha | Bank Nationalnobu vs. Lenox Pasifik Investama |
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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 Global Markets Map module to get a quick overview of global market snapshot using zoomable world map. Drill down to check world indexes.
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