Correlation Between Darma Henwa and Benakat Petroleum
Can any of the company-specific risk be diversified away by investing in both Darma Henwa and Benakat Petroleum 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 Darma Henwa and Benakat Petroleum into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Darma Henwa Tbk and Benakat Petroleum Energy, you can compare the effects of market volatilities on Darma Henwa and Benakat Petroleum 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 Darma Henwa with a short position of Benakat Petroleum. Check out your portfolio center. Please also check ongoing floating volatility patterns of Darma Henwa and Benakat Petroleum.
Diversification Opportunities for Darma Henwa and Benakat Petroleum
0.7 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Darma and Benakat is 0.7. Overlapping area represents the amount of risk that can be diversified away by holding Darma Henwa Tbk and Benakat Petroleum Energy in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Benakat Petroleum Energy and Darma Henwa 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 Darma Henwa Tbk are associated (or correlated) with Benakat Petroleum. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Benakat Petroleum Energy has no effect on the direction of Darma Henwa i.e., Darma Henwa and Benakat Petroleum go up and down completely randomly.
Pair Corralation between Darma Henwa and Benakat Petroleum
Assuming the 90 days trading horizon Darma Henwa Tbk is expected to generate 1.65 times more return on investment than Benakat Petroleum. However, Darma Henwa is 1.65 times more volatile than Benakat Petroleum Energy. It trades about 0.1 of its potential returns per unit of risk. Benakat Petroleum Energy is currently generating about -0.19 per unit of risk. If you would invest 10,700 in Darma Henwa Tbk on August 24, 2024 and sell it today you would earn a total of 1,300 from holding Darma Henwa Tbk or generate 12.15% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Darma Henwa Tbk vs. Benakat Petroleum Energy
Performance |
| Timeline |
| Darma Henwa Tbk |
| Benakat Petroleum Energy |
Darma Henwa and Benakat Petroleum Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Darma Henwa and Benakat Petroleum
The main advantage of trading using opposite Darma Henwa and Benakat Petroleum positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Darma Henwa position performs unexpectedly, Benakat Petroleum 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 Benakat Petroleum will offset losses from the drop in Benakat Petroleum's long position.| Darma Henwa vs. Kedaung Indah Can | Darma Henwa vs. Langgeng Makmur Industri | Darma Henwa vs. Kabelindo Murni Tbk | Darma Henwa vs. Mustika Ratu Tbk |
| Benakat Petroleum vs. Petrosea Tbk | Benakat Petroleum vs. Harum Energy Tbk | Benakat Petroleum vs. Perdana Karya Perkasa | Benakat Petroleum vs. Samindo Resources 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 Competition Analyzer module to analyze and compare many basic indicators for a group of related or unrelated entities.
Other Complementary Tools
| Global Correlations Find global opportunities by holding instruments from different markets | |
| Portfolio Manager State of the art Portfolio Manager to monitor and improve performance of your invested capital | |
| Positions Ratings Determine portfolio positions ratings based on digital equity recommendations. Macroaxis instant position ratings are based on combination of fundamental analysis and risk-adjusted market performance | |
| Options Analysis Analyze and evaluate options and option chains as a potential hedge for your portfolios | |
| Instant Ratings Determine any equity ratings based on digital recommendations. Macroaxis instant equity ratings are based on combination of fundamental analysis and risk-adjusted market performance |