Correlation Between Diamond Citra and Pratama Widya
Can any of the company-specific risk be diversified away by investing in both Diamond Citra and Pratama Widya 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 Diamond Citra and Pratama Widya into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Diamond Citra Propertindo and Pratama Widya Tbk, you can compare the effects of market volatilities on Diamond Citra and Pratama Widya 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 Diamond Citra with a short position of Pratama Widya. Check out your portfolio center. Please also check ongoing floating volatility patterns of Diamond Citra and Pratama Widya.
Diversification Opportunities for Diamond Citra and Pratama Widya
0.07 | Correlation Coefficient |
Significant diversification
The 3 months correlation between Diamond and Pratama is 0.07. Overlapping area represents the amount of risk that can be diversified away by holding Diamond Citra Propertindo and Pratama Widya Tbk in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Pratama Widya Tbk and Diamond Citra 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 Diamond Citra Propertindo are associated (or correlated) with Pratama Widya. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Pratama Widya Tbk has no effect on the direction of Diamond Citra i.e., Diamond Citra and Pratama Widya go up and down completely randomly.
Pair Corralation between Diamond Citra and Pratama Widya
Assuming the 90 days trading horizon Diamond Citra Propertindo is expected to under-perform the Pratama Widya. In addition to that, Diamond Citra is 13.19 times more volatile than Pratama Widya Tbk. It trades about -0.03 of its total potential returns per unit of risk. Pratama Widya Tbk is currently generating about -0.19 per unit of volatility. If you would invest 95,000 in Pratama Widya Tbk on September 4, 2024 and sell it today you would lose (2,500) from holding Pratama Widya Tbk or give up 2.63% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Diamond Citra Propertindo vs. Pratama Widya Tbk
Performance |
| Timeline |
| Diamond Citra Propertindo |
| Pratama Widya Tbk |
Diamond Citra and Pratama Widya Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Diamond Citra and Pratama Widya
The main advantage of trading using opposite Diamond Citra and Pratama Widya positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Diamond Citra position performs unexpectedly, Pratama Widya 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 Pratama Widya will offset losses from the drop in Pratama Widya's long position.| Diamond Citra vs. Bima Sakti Pertiwi | Diamond Citra vs. Karya Bersama Anugerah | Diamond Citra vs. Pollux Properti Indonesia | Diamond Citra vs. Surya Permata Andalan |
| Pratama Widya vs. Kencana Energi Lestari | Pratama Widya vs. Pelita Samudera Shipping | Pratama Widya vs. Paramita Bangun Sarana | Pratama Widya vs. Dana Brata Luhur |
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 Pair Correlation module to compare performance and examine fundamental relationship between any two equity instruments.
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