Correlation Between Pikko Land and Dow Jones
Can any of the company-specific risk be diversified away by investing in both Pikko Land 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 Pikko Land and Dow Jones into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Pikko Land Development and Dow Jones Industrial, you can compare the effects of market volatilities on Pikko Land 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 Pikko Land with a short position of Dow Jones. Check out your portfolio center. Please also check ongoing floating volatility patterns of Pikko Land and Dow Jones.
Diversification Opportunities for Pikko Land and Dow Jones
-0.28 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Pikko and Dow is -0.28. Overlapping area represents the amount of risk that can be diversified away by holding Pikko Land Development 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 Pikko Land 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 Pikko Land Development 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 Pikko Land i.e., Pikko Land and Dow Jones go up and down completely randomly.
Pair Corralation between Pikko Land and Dow Jones
Assuming the 90 days trading horizon Pikko Land Development is expected to under-perform the Dow Jones. In addition to that, Pikko Land is 5.28 times more volatile than Dow Jones Industrial. It trades about -0.02 of its total potential returns per unit of risk. Dow Jones Industrial is currently generating about 0.09 per unit of volatility. If you would invest 3,265,670 in Dow Jones Industrial on November 19, 2024 and sell it today you would earn a total of 1,188,938 from holding Dow Jones Industrial or generate 36.41% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 94.35% |
| Values | Daily Returns |
Pikko Land Development vs. Dow Jones Industrial
Performance |
| Timeline |
Pikko Land and Dow Jones Volatility Contrast
Predicted Return Density |
| Returns |
Pikko Land Development
Pair trading matchups for Pikko Land
Dow Jones Industrial
Pair trading matchups for Dow Jones
Pair Trading with Pikko Land and Dow Jones
The main advantage of trading using opposite Pikko Land and Dow Jones positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Pikko Land 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.| Pikko Land vs. Ristia Bintang Mahkotasejati | Pikko Land vs. Suryamas Dutamakmur Tbk | Pikko Land vs. Indonesia Prima Property | Pikko Land vs. Pudjiadi Prestige Tbk |
| Dow Jones vs. National CineMedia | Dow Jones vs. Emerson Radio | Dow Jones vs. Space Communication | Dow Jones vs. JD Sports Fashion |
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 Forecasting module to use basic forecasting models to generate price predictions and determine price momentum.
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