Correlation Between Darma Henwa and Exploitasi Energi
Can any of the company-specific risk be diversified away by investing in both Darma Henwa and Exploitasi Energi 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 Exploitasi Energi 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 Exploitasi Energi Indonesia, you can compare the effects of market volatilities on Darma Henwa and Exploitasi Energi 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 Exploitasi Energi. Check out your portfolio center. Please also check ongoing floating volatility patterns of Darma Henwa and Exploitasi Energi.
Diversification Opportunities for Darma Henwa and Exploitasi Energi
0.13 | Correlation Coefficient |
Average diversification
The 3 months correlation between Darma and Exploitasi is 0.13. Overlapping area represents the amount of risk that can be diversified away by holding Darma Henwa Tbk and Exploitasi Energi Indonesia in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Exploitasi Energi 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 Exploitasi Energi. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Exploitasi Energi has no effect on the direction of Darma Henwa i.e., Darma Henwa and Exploitasi Energi go up and down completely randomly.
Pair Corralation between Darma Henwa and Exploitasi Energi
Assuming the 90 days trading horizon Darma Henwa Tbk is expected to generate 0.5 times more return on investment than Exploitasi Energi. However, Darma Henwa Tbk is 2.01 times less risky than Exploitasi Energi. It trades about 0.08 of its potential returns per unit of risk. Exploitasi Energi Indonesia is currently generating about 0.03 per unit of risk. If you would invest 5,000 in Darma Henwa Tbk on November 27, 2024 and sell it today you would earn a total of 9,100 from holding Darma Henwa Tbk or generate 182.0% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Darma Henwa Tbk vs. Exploitasi Energi Indonesia
Performance |
| Timeline |
| Darma Henwa Tbk |
| Exploitasi Energi |
Darma Henwa and Exploitasi Energi Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Darma Henwa and Exploitasi Energi
The main advantage of trading using opposite Darma Henwa and Exploitasi Energi positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Darma Henwa position performs unexpectedly, Exploitasi Energi 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 Exploitasi Energi will offset losses from the drop in Exploitasi Energi's long position.| Darma Henwa vs. Bakrieland Development Tbk | Darma Henwa vs. Energi Mega Persada | Darma Henwa vs. Bakrie Brothers Tbk | Darma Henwa vs. Bakrie Sumatera Plantations |
| Exploitasi Energi vs. Central Proteina Prima | Exploitasi Energi vs. Darma Henwa Tbk | Exploitasi Energi vs. Bakrieland Development Tbk | Exploitasi Energi vs. Energi Mega Persada |
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 Portfolio Diagnostics module to use generated alerts and portfolio events aggregator to diagnose current holdings.
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