Correlation Between DCI Indonesia and Indointernet Tbk
Can any of the company-specific risk be diversified away by investing in both DCI Indonesia and Indointernet Tbk 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 DCI Indonesia and Indointernet Tbk into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between DCI Indonesia Tbk and Indointernet Tbk PT, you can compare the effects of market volatilities on DCI Indonesia and Indointernet Tbk 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 DCI Indonesia with a short position of Indointernet Tbk. Check out your portfolio center. Please also check ongoing floating volatility patterns of DCI Indonesia and Indointernet Tbk.
Diversification Opportunities for DCI Indonesia and Indointernet Tbk
0.42 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between DCI and Indointernet is 0.42. Overlapping area represents the amount of risk that can be diversified away by holding DCI Indonesia Tbk and Indointernet Tbk PT in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Indointernet Tbk and DCI Indonesia 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 DCI Indonesia Tbk are associated (or correlated) with Indointernet Tbk. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Indointernet Tbk has no effect on the direction of DCI Indonesia i.e., DCI Indonesia and Indointernet Tbk go up and down completely randomly.
Pair Corralation between DCI Indonesia and Indointernet Tbk
Assuming the 90 days trading horizon DCI Indonesia Tbk is expected to generate 1.59 times more return on investment than Indointernet Tbk. However, DCI Indonesia is 1.59 times more volatile than Indointernet Tbk PT. It trades about 0.17 of its potential returns per unit of risk. Indointernet Tbk PT is currently generating about 0.0 per unit of risk. If you would invest 4,210,000 in DCI Indonesia Tbk on October 26, 2024 and sell it today you would earn a total of 445,000 from holding DCI Indonesia Tbk or generate 10.57% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 94.74% |
| Values | Daily Returns |
DCI Indonesia Tbk vs. Indointernet Tbk PT
Performance |
| Timeline |
| DCI Indonesia Tbk |
| Indointernet Tbk |
DCI Indonesia and Indointernet Tbk Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with DCI Indonesia and Indointernet Tbk
The main advantage of trading using opposite DCI Indonesia and Indointernet Tbk positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if DCI Indonesia position performs unexpectedly, Indointernet Tbk 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 Indointernet Tbk will offset losses from the drop in Indointernet Tbk's long position.| DCI Indonesia vs. Bank Artos Indonesia | DCI Indonesia vs. Elang Mahkota Teknologi | DCI Indonesia vs. Indointernet Tbk PT | DCI Indonesia vs. PT Bukalapak |
| Indointernet Tbk vs. DCI Indonesia Tbk | Indointernet Tbk vs. Digital Mediatama Maxima | Indointernet Tbk vs. Multipolar Technology Tbk | Indointernet Tbk vs. Bank Net Indonesia |
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 Correlation Analysis module to reduce portfolio risk simply by holding instruments which are not perfectly correlated.
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