Correlation Between Pratama Widya and Dow Jones
Can any of the company-specific risk be diversified away by investing in both Pratama Widya 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 Pratama Widya and Dow Jones into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Pratama Widya Tbk and Dow Jones Industrial, you can compare the effects of market volatilities on Pratama Widya 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 Pratama Widya with a short position of Dow Jones. Check out your portfolio center. Please also check ongoing floating volatility patterns of Pratama Widya and Dow Jones.
Diversification Opportunities for Pratama Widya and Dow Jones
-0.03 | Correlation Coefficient |
Good diversification
The 3 months correlation between Pratama and Dow is -0.03. Overlapping area represents the amount of risk that can be diversified away by holding Pratama Widya 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 Pratama Widya 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 Pratama Widya 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 Pratama Widya i.e., Pratama Widya and Dow Jones go up and down completely randomly.
Pair Corralation between Pratama Widya and Dow Jones
Assuming the 90 days trading horizon Pratama Widya Tbk is expected to under-perform the Dow Jones. But the stock apears to be less risky and, when comparing its historical volatility, Pratama Widya Tbk is 1.4 times less risky than Dow Jones. The stock trades about -0.24 of its potential returns per unit of risk. The Dow Jones Industrial is currently generating about 0.29 of returns per unit of risk over similar time horizon. If you would invest 4,214,154 in Dow Jones Industrial on August 31, 2024 and sell it today you would earn a total of 258,052 from holding Dow Jones Industrial or generate 6.12% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Pratama Widya Tbk vs. Dow Jones Industrial
Performance |
| Timeline |
Pratama Widya and Dow Jones Volatility Contrast
Predicted Return Density |
| Returns |
Pratama Widya Tbk
Pair trading matchups for Pratama Widya
Dow Jones Industrial
Pair trading matchups for Dow Jones
Pair Trading with Pratama Widya and Dow Jones
The main advantage of trading using opposite Pratama Widya and Dow Jones positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Pratama Widya 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.| Pratama Widya vs. Kencana Energi Lestari | Pratama Widya vs. Pelita Samudera Shipping | Pratama Widya vs. Paramita Bangun Sarana | Pratama Widya vs. Dana Brata Luhur |
| 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 Equity Analysis module to research over 250,000 global equities including funds, stocks and ETFs to find investment opportunities.
Other Complementary Tools
| Funds Screener Find actively-traded funds from around the world traded on over 30 global exchanges | |
| Companies Directory Evaluate performance of over 100,000 Stocks, Funds, and ETFs against different fundamentals | |
| Theme Ratings Determine theme ratings based on digital equity recommendations. Macroaxis theme ratings are based on combination of fundamental analysis and risk-adjusted market performance | |
| Global Markets Map Get a quick overview of global market snapshot using zoomable world map. Drill down to check world indexes | |
| Portfolio Suggestion Get suggestions outside of your existing asset allocation including your own model portfolios |