Correlation Between Pudjiadi Sons and Dow Jones
Can any of the company-specific risk be diversified away by investing in both Pudjiadi Sons 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 Pudjiadi Sons and Dow Jones into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Pudjiadi Sons Tbk and Dow Jones Industrial, you can compare the effects of market volatilities on Pudjiadi Sons 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 Pudjiadi Sons with a short position of Dow Jones. Check out your portfolio center. Please also check ongoing floating volatility patterns of Pudjiadi Sons and Dow Jones.
Diversification Opportunities for Pudjiadi Sons and Dow Jones
0.48 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Pudjiadi and Dow is 0.48. Overlapping area represents the amount of risk that can be diversified away by holding Pudjiadi Sons 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 Pudjiadi Sons 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 Pudjiadi Sons 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 Pudjiadi Sons i.e., Pudjiadi Sons and Dow Jones go up and down completely randomly.
Pair Corralation between Pudjiadi Sons and Dow Jones
Assuming the 90 days trading horizon Pudjiadi Sons Tbk is expected to generate 4.9 times more return on investment than Dow Jones. However, Pudjiadi Sons is 4.9 times more volatile than Dow Jones Industrial. It trades about 0.11 of its potential returns per unit of risk. Dow Jones Industrial is currently generating about 0.11 per unit of risk. If you would invest 43,605 in Pudjiadi Sons Tbk on August 26, 2024 and sell it today you would earn a total of 92,395 from holding Pudjiadi Sons Tbk or generate 211.89% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 95.43% |
| Values | Daily Returns |
Pudjiadi Sons Tbk vs. Dow Jones Industrial
Performance |
| Timeline |
Pudjiadi Sons and Dow Jones Volatility Contrast
Predicted Return Density |
| Returns |
Pudjiadi Sons Tbk
Pair trading matchups for Pudjiadi Sons
Dow Jones Industrial
Pair trading matchups for Dow Jones
Pair Trading with Pudjiadi Sons and Dow Jones
The main advantage of trading using opposite Pudjiadi Sons and Dow Jones positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Pudjiadi Sons 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.| Pudjiadi Sons vs. Inocycle Technology Tbk | Pudjiadi Sons vs. Enseval Putra Megatrading | Pudjiadi Sons vs. Equity Development Investment | Pudjiadi Sons vs. Krakatau Steel Persero |
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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 Competition Analyzer module to analyze and compare many basic indicators for a group of related or unrelated entities.
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