Correlation Between Victoria Investama and Dow Jones
Can any of the company-specific risk be diversified away by investing in both Victoria Investama 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 Victoria Investama and Dow Jones into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Victoria Investama Tbk and Dow Jones Industrial, you can compare the effects of market volatilities on Victoria Investama 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 Victoria Investama with a short position of Dow Jones. Check out your portfolio center. Please also check ongoing floating volatility patterns of Victoria Investama and Dow Jones.
Diversification Opportunities for Victoria Investama and Dow Jones
0.62 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Victoria and Dow is 0.62. Overlapping area represents the amount of risk that can be diversified away by holding Victoria Investama 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 Victoria Investama 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 Victoria Investama 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 Victoria Investama i.e., Victoria Investama and Dow Jones go up and down completely randomly.
Pair Corralation between Victoria Investama and Dow Jones
Assuming the 90 days trading horizon Victoria Investama Tbk is expected to generate 6.2 times more return on investment than Dow Jones. However, Victoria Investama is 6.2 times more volatile than Dow Jones Industrial. It trades about 0.03 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 16,200 in Victoria Investama Tbk on August 30, 2024 and sell it today you would earn a total of 4,400 from holding Victoria Investama Tbk or generate 27.16% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 95.36% |
| Values | Daily Returns |
Victoria Investama Tbk vs. Dow Jones Industrial
Performance |
| Timeline |
Victoria Investama and Dow Jones Volatility Contrast
Predicted Return Density |
| Returns |
Victoria Investama Tbk
Pair trading matchups for Victoria Investama
Dow Jones Industrial
Pair trading matchups for Dow Jones
Pair Trading with Victoria Investama and Dow Jones
The main advantage of trading using opposite Victoria Investama and Dow Jones positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Victoria Investama 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.| Victoria Investama vs. Victoria Insurance Tbk | Victoria Investama vs. Verena Multi Finance | Victoria Investama vs. Trimegah Securities Tbk | Victoria Investama vs. Tifa Finance Tbk |
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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 Global Markets Map module to get a quick overview of global market snapshot using zoomable world map. Drill down to check world indexes.
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