Correlation Between Sumber Global and Dow Jones
Can any of the company-specific risk be diversified away by investing in both Sumber Global 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 Sumber Global and Dow Jones into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Sumber Global Energy and Dow Jones Industrial, you can compare the effects of market volatilities on Sumber Global 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 Sumber Global with a short position of Dow Jones. Check out your portfolio center. Please also check ongoing floating volatility patterns of Sumber Global and Dow Jones.
Diversification Opportunities for Sumber Global and Dow Jones
-0.23 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Sumber and Dow is -0.23. Overlapping area represents the amount of risk that can be diversified away by holding Sumber Global Energy 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 Sumber Global 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 Sumber Global Energy 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 Sumber Global i.e., Sumber Global and Dow Jones go up and down completely randomly.
Pair Corralation between Sumber Global and Dow Jones
Assuming the 90 days trading horizon Sumber Global Energy is expected to generate 64.08 times more return on investment than Dow Jones. However, Sumber Global is 64.08 times more volatile than Dow Jones Industrial. It trades about 0.05 of its potential returns per unit of risk. Dow Jones Industrial is currently generating about 0.08 per unit of risk. If you would invest 15,695 in Sumber Global Energy on August 30, 2024 and sell it today you would earn a total of 24,305 from holding Sumber Global Energy or generate 154.86% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 95.56% |
| Values | Daily Returns |
Sumber Global Energy vs. Dow Jones Industrial
Performance |
| Timeline |
Sumber Global and Dow Jones Volatility Contrast
Predicted Return Density |
| Returns |
Sumber Global Energy
Pair trading matchups for Sumber Global
Dow Jones Industrial
Pair trading matchups for Dow Jones
Pair Trading with Sumber Global and Dow Jones
The main advantage of trading using opposite Sumber Global and Dow Jones positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Sumber Global 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.| Sumber Global vs. Golden Eagle Energy | Sumber Global vs. Baramulti Suksessarana Tbk | Sumber Global vs. TBS Energi Utama | Sumber Global vs. Resource Alam Indonesia |
| Dow Jones vs. Kaltura | Dow Jones vs. Artisan Partners Asset | Dow Jones vs. US Global Investors | Dow Jones vs. Analog Devices |
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 Piotroski F Score module to get Piotroski F Score based on the binary analysis strategy of nine different fundamentals.
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