Correlation Between Bukit Asam and Dow Jones
Can any of the company-specific risk be diversified away by investing in both Bukit Asam 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 Bukit Asam and Dow Jones into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Bukit Asam Tbk and Dow Jones Industrial, you can compare the effects of market volatilities on Bukit Asam 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 Bukit Asam with a short position of Dow Jones. Check out your portfolio center. Please also check ongoing floating volatility patterns of Bukit Asam and Dow Jones.
Diversification Opportunities for Bukit Asam and Dow Jones
0.51 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Bukit and Dow is 0.51. Overlapping area represents the amount of risk that can be diversified away by holding Bukit Asam 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 Bukit Asam 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 Bukit Asam 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 Bukit Asam i.e., Bukit Asam and Dow Jones go up and down completely randomly.
Pair Corralation between Bukit Asam and Dow Jones
Assuming the 90 days horizon Bukit Asam Tbk is expected to generate 2.59 times more return on investment than Dow Jones. However, Bukit Asam is 2.59 times more volatile than Dow Jones Industrial. It trades about 0.07 of its potential returns per unit of risk. Dow Jones Industrial is currently generating about 0.15 per unit of risk. If you would invest 435.00 in Bukit Asam Tbk on August 25, 2024 and sell it today you would earn a total of 34.00 from holding Bukit Asam Tbk or generate 7.82% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Bukit Asam Tbk vs. Dow Jones Industrial
Performance |
| Timeline |
Bukit Asam and Dow Jones Volatility Contrast
Predicted Return Density |
| Returns |
Bukit Asam Tbk
Pair trading matchups for Bukit Asam
Dow Jones Industrial
Pair trading matchups for Dow Jones
Pair Trading with Bukit Asam and Dow Jones
The main advantage of trading using opposite Bukit Asam and Dow Jones positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Bukit Asam 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.| Bukit Asam vs. Morien Resources Corp | Bukit Asam vs. Adaro Energy Tbk | Bukit Asam vs. Alliance Resource Partners | Bukit Asam vs. Astera Labs, Common |
| Dow Jones vs. Vistra Energy Corp | Dow Jones vs. Fluence Energy | Dow Jones vs. Old Republic International | Dow Jones vs. Empresa Distribuidora y |
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.
Other Complementary Tools
| Portfolio Volatility Check portfolio volatility and analyze historical return density to properly model market risk | |
| Cryptocurrency Center Build and monitor diversified portfolio of extremely risky digital assets and cryptocurrency | |
| Money Managers Screen money managers from public funds and ETFs managed around the world | |
| Global Correlations Find global opportunities by holding instruments from different markets | |
| Fundamentals Comparison Compare fundamentals across multiple equities to find investing opportunities |