Correlation Between Asiaplast Industries and Duta Pertiwi
Can any of the company-specific risk be diversified away by investing in both Asiaplast Industries and Duta Pertiwi 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 Asiaplast Industries and Duta Pertiwi into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Asiaplast Industries Tbk and Duta Pertiwi Nusantara, you can compare the effects of market volatilities on Asiaplast Industries and Duta Pertiwi 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 Asiaplast Industries with a short position of Duta Pertiwi. Check out your portfolio center. Please also check ongoing floating volatility patterns of Asiaplast Industries and Duta Pertiwi.
Diversification Opportunities for Asiaplast Industries and Duta Pertiwi
0.4 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Asiaplast and Duta is 0.4. Overlapping area represents the amount of risk that can be diversified away by holding Asiaplast Industries Tbk and Duta Pertiwi Nusantara in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Duta Pertiwi Nusantara and Asiaplast Industries 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 Asiaplast Industries Tbk are associated (or correlated) with Duta Pertiwi. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Duta Pertiwi Nusantara has no effect on the direction of Asiaplast Industries i.e., Asiaplast Industries and Duta Pertiwi go up and down completely randomly.
Pair Corralation between Asiaplast Industries and Duta Pertiwi
Assuming the 90 days trading horizon Asiaplast Industries Tbk is expected to generate 2.06 times more return on investment than Duta Pertiwi. However, Asiaplast Industries is 2.06 times more volatile than Duta Pertiwi Nusantara. It trades about 0.07 of its potential returns per unit of risk. Duta Pertiwi Nusantara is currently generating about -0.01 per unit of risk. If you would invest 23,974 in Asiaplast Industries Tbk on August 31, 2024 and sell it today you would earn a total of 31,026 from holding Asiaplast Industries Tbk or generate 129.42% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Asiaplast Industries Tbk vs. Duta Pertiwi Nusantara
Performance |
| Timeline |
| Asiaplast Industries Tbk |
| Duta Pertiwi Nusantara |
Asiaplast Industries and Duta Pertiwi Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Asiaplast Industries and Duta Pertiwi
The main advantage of trading using opposite Asiaplast Industries and Duta Pertiwi positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Asiaplast Industries position performs unexpectedly, Duta Pertiwi 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 Duta Pertiwi will offset losses from the drop in Duta Pertiwi's long position.| Asiaplast Industries vs. Argha Karya Prima | Asiaplast Industries vs. Alumindo Light Metal | Asiaplast Industries vs. Anugerah Kagum Karya | Asiaplast Industries vs. Asahimas Flat Glass |
| Duta Pertiwi vs. Intanwijaya Internasional Tbk | Duta Pertiwi vs. Betonjaya Manunggal Tbk | Duta Pertiwi vs. Asiaplast Industries Tbk | Duta Pertiwi vs. Argha Karya Prima |
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 Watchlist Optimization module to optimize watchlists to build efficient portfolios or rebalance existing positions based on the mean-variance optimization algorithm.
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