Correlation Between Diamond Citra and Putra Rajawali
Can any of the company-specific risk be diversified away by investing in both Diamond Citra and Putra Rajawali 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 Putra Rajawali 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 Putra Rajawali Kencana, you can compare the effects of market volatilities on Diamond Citra and Putra Rajawali 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 Putra Rajawali. Check out your portfolio center. Please also check ongoing floating volatility patterns of Diamond Citra and Putra Rajawali.
Diversification Opportunities for Diamond Citra and Putra Rajawali
0.3 | Correlation Coefficient |
Weak diversification
The 3 months correlation between Diamond and Putra is 0.3. Overlapping area represents the amount of risk that can be diversified away by holding Diamond Citra Propertindo and Putra Rajawali Kencana in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Putra Rajawali Kencana 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 Putra Rajawali. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Putra Rajawali Kencana has no effect on the direction of Diamond Citra i.e., Diamond Citra and Putra Rajawali go up and down completely randomly.
Pair Corralation between Diamond Citra and Putra Rajawali
Assuming the 90 days trading horizon Diamond Citra Propertindo is expected to generate 1.55 times more return on investment than Putra Rajawali. However, Diamond Citra is 1.55 times more volatile than Putra Rajawali Kencana. It trades about 0.05 of its potential returns per unit of risk. Putra Rajawali Kencana is currently generating about -0.06 per unit of risk. If you would invest 700.00 in Diamond Citra Propertindo on November 3, 2024 and sell it today you would earn a total of 100.00 from holding Diamond Citra Propertindo or generate 14.29% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Diamond Citra Propertindo vs. Putra Rajawali Kencana
Performance |
| Timeline |
| Diamond Citra Propertindo |
| Putra Rajawali Kencana |
Diamond Citra and Putra Rajawali Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Diamond Citra and Putra Rajawali
The main advantage of trading using opposite Diamond Citra and Putra Rajawali positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Diamond Citra position performs unexpectedly, Putra Rajawali 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 Putra Rajawali will offset losses from the drop in Putra Rajawali's long position.| Diamond Citra vs. Karya Bersama Anugerah | Diamond Citra vs. Andalan Sakti Primaindo | Diamond Citra vs. Perintis Triniti Properti | Diamond Citra vs. Repower Asia Indonesia |
| Putra Rajawali vs. Kapuas Prima Coal | Putra Rajawali vs. Karya Bersama Anugerah | Putra Rajawali vs. Era Mandiri Cemerlang | Putra Rajawali vs. PP Presisi Tbk |
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 Price Ceiling Movement module to calculate and plot Price Ceiling Movement for different equity instruments.
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