Correlation Between Sejahteraraya Anugrahjaya and Dow Jones
Can any of the company-specific risk be diversified away by investing in both Sejahteraraya Anugrahjaya 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 Sejahteraraya Anugrahjaya and Dow Jones into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Sejahteraraya Anugrahjaya Tbk and Dow Jones Industrial, you can compare the effects of market volatilities on Sejahteraraya Anugrahjaya 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 Sejahteraraya Anugrahjaya with a short position of Dow Jones. Check out your portfolio center. Please also check ongoing floating volatility patterns of Sejahteraraya Anugrahjaya and Dow Jones.
Diversification Opportunities for Sejahteraraya Anugrahjaya and Dow Jones
0.77 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Sejahteraraya and Dow is 0.77. Overlapping area represents the amount of risk that can be diversified away by holding Sejahteraraya Anugrahjaya 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 Sejahteraraya Anugrahjaya 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 Sejahteraraya Anugrahjaya 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 Sejahteraraya Anugrahjaya i.e., Sejahteraraya Anugrahjaya and Dow Jones go up and down completely randomly.
Pair Corralation between Sejahteraraya Anugrahjaya and Dow Jones
Assuming the 90 days trading horizon Sejahteraraya Anugrahjaya Tbk is expected to generate 1.92 times more return on investment than Dow Jones. However, Sejahteraraya Anugrahjaya is 1.92 times more volatile than Dow Jones Industrial. It trades about 0.21 of its potential returns per unit of risk. Dow Jones Industrial is currently generating about 0.13 per unit of risk. If you would invest 228,000 in Sejahteraraya Anugrahjaya Tbk on August 27, 2024 and sell it today you would earn a total of 71,000 from holding Sejahteraraya Anugrahjaya Tbk or generate 31.14% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Sejahteraraya Anugrahjaya Tbk vs. Dow Jones Industrial
Performance |
| Timeline |
Sejahteraraya Anugrahjaya and Dow Jones Volatility Contrast
Predicted Return Density |
| Returns |
Sejahteraraya Anugrahjaya Tbk
Pair trading matchups for Sejahteraraya Anugrahjaya
Dow Jones Industrial
Pair trading matchups for Dow Jones
Pair Trading with Sejahteraraya Anugrahjaya and Dow Jones
The main advantage of trading using opposite Sejahteraraya Anugrahjaya and Dow Jones positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Sejahteraraya Anugrahjaya 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 Sejahteraraya Anugrahjaya Tbk 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.
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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 Fundamentals Comparison module to compare fundamentals across multiple equities to find investing opportunities.
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