Correlation Between PT Surya and Dow Jones
Can any of the company-specific risk be diversified away by investing in both PT Surya 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 PT Surya and Dow Jones into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between PT Surya Pertiwi and Dow Jones Industrial, you can compare the effects of market volatilities on PT Surya 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 PT Surya with a short position of Dow Jones. Check out your portfolio center. Please also check ongoing floating volatility patterns of PT Surya and Dow Jones.
Diversification Opportunities for PT Surya and Dow Jones
Poor diversification
The 3 months correlation between SPTO and Dow is 0.77. Overlapping area represents the amount of risk that can be diversified away by holding PT Surya Pertiwi 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 PT Surya 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 PT Surya Pertiwi 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 PT Surya i.e., PT Surya and Dow Jones go up and down completely randomly.
Pair Corralation between PT Surya and Dow Jones
Assuming the 90 days trading horizon PT Surya Pertiwi is expected to generate 1.74 times more return on investment than Dow Jones. However, PT Surya is 1.74 times more volatile than Dow Jones Industrial. It trades about 0.27 of its potential returns per unit of risk. Dow Jones Industrial is currently generating about 0.26 per unit of risk. If you would invest 56,818 in PT Surya Pertiwi on August 27, 2024 and sell it today you would earn a total of 5,682 from holding PT Surya Pertiwi or generate 10.0% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
PT Surya Pertiwi vs. Dow Jones Industrial
Performance |
| Timeline |
PT Surya and Dow Jones Volatility Contrast
Predicted Return Density |
| Returns |
PT Surya Pertiwi
Pair trading matchups for PT Surya
Dow Jones Industrial
Pair trading matchups for Dow Jones
Pair Trading with PT Surya and Dow Jones
The main advantage of trading using opposite PT Surya and Dow Jones positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if PT Surya 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.The idea behind PT Surya Pertiwi and Dow Jones Industrial pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.| Dow Jones vs. Meiwu Technology Co | Dow Jones vs. 17 Education Technology | Dow Jones vs. 51Talk Online Education | Dow Jones vs. Afya |
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 Commodity Channel module to use Commodity Channel Index to analyze current equity momentum.
Other Complementary Tools
| Cryptocurrency Center Build and monitor diversified portfolio of extremely risky digital assets and cryptocurrency | |
| Stock Screener Find equities using a custom stock filter or screen asymmetry in trading patterns, price, volume, or investment outlook. | |
| Portfolio Rebalancing Analyze risk-adjusted returns against different time horizons to find asset-allocation targets | |
| Price Transformation Use Price Transformation models to analyze the depth of different equity instruments across global markets | |
| Piotroski F Score Get Piotroski F Score based on the binary analysis strategy of nine different fundamentals |