Correlation Between Satria Mega and Dow Jones
Can any of the company-specific risk be diversified away by investing in both Satria Mega 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 Satria Mega and Dow Jones into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Satria Mega Kencana and Dow Jones Industrial, you can compare the effects of market volatilities on Satria Mega 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 Satria Mega with a short position of Dow Jones. Check out your portfolio center. Please also check ongoing floating volatility patterns of Satria Mega and Dow Jones.
Diversification Opportunities for Satria Mega and Dow Jones
0.51 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Satria and Dow is 0.51. Overlapping area represents the amount of risk that can be diversified away by holding Satria Mega Kencana 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 Satria Mega 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 Satria Mega Kencana 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 Satria Mega i.e., Satria Mega and Dow Jones go up and down completely randomly.
Pair Corralation between Satria Mega and Dow Jones
Assuming the 90 days trading horizon Satria Mega Kencana is expected to generate 11.0 times more return on investment than Dow Jones. However, Satria Mega is 11.0 times more volatile than Dow Jones Industrial. It trades about 0.09 of its potential returns per unit of risk. Dow Jones Industrial is currently generating about 0.16 per unit of risk. If you would invest 17,100 in Satria Mega Kencana on August 30, 2024 and sell it today you would earn a total of 13,900 from holding Satria Mega Kencana or generate 81.29% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 99.21% |
| Values | Daily Returns |
Satria Mega Kencana vs. Dow Jones Industrial
Performance |
| Timeline |
Satria Mega and Dow Jones Volatility Contrast
Predicted Return Density |
| Returns |
Satria Mega Kencana
Pair trading matchups for Satria Mega
Dow Jones Industrial
Pair trading matchups for Dow Jones
Pair Trading with Satria Mega and Dow Jones
The main advantage of trading using opposite Satria Mega and Dow Jones positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Satria Mega 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.| Satria Mega vs. Shield On Service | Satria Mega vs. MNC Studios International | Satria Mega vs. Royal Prima PT | Satria Mega vs. Sanurhasta Mitra PT |
| Dow Jones vs. Skillful Craftsman Education | Dow Jones vs. Acco Brands | Dow Jones vs. Cracker Barrel Old | Dow Jones vs. Coursera |
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 Odds Of Bankruptcy module to get analysis of equity chance of financial distress in the next 2 years.
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