Correlation Between Darma Henwa and Central Proteina
Can any of the company-specific risk be diversified away by investing in both Darma Henwa and Central Proteina 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 Central Proteina 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 Central Proteina Prima, you can compare the effects of market volatilities on Darma Henwa and Central Proteina 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 Central Proteina. Check out your portfolio center. Please also check ongoing floating volatility patterns of Darma Henwa and Central Proteina.
Diversification Opportunities for Darma Henwa and Central Proteina
-0.06 | Correlation Coefficient |
Good diversification
The 3 months correlation between Darma and Central is -0.06. Overlapping area represents the amount of risk that can be diversified away by holding Darma Henwa Tbk and Central Proteina Prima in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Central Proteina Prima 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 Central Proteina. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Central Proteina Prima has no effect on the direction of Darma Henwa i.e., Darma Henwa and Central Proteina go up and down completely randomly.
Pair Corralation between Darma Henwa and Central Proteina
Assuming the 90 days trading horizon Darma Henwa Tbk is expected to under-perform the Central Proteina. But the stock apears to be less risky and, when comparing its historical volatility, Darma Henwa Tbk is 1.63 times less risky than Central Proteina. The stock trades about -0.01 of its potential returns per unit of risk. The Central Proteina Prima is currently generating about 0.03 of returns per unit of risk over similar time horizon. If you would invest 5,000 in Central Proteina Prima on November 5, 2024 and sell it today you would earn a total of 0.00 from holding Central Proteina Prima or generate 0.0% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Darma Henwa Tbk vs. Central Proteina Prima
Performance |
| Timeline |
| Darma Henwa Tbk |
| Central Proteina Prima |
Darma Henwa and Central Proteina Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Darma Henwa and Central Proteina
The main advantage of trading using opposite Darma Henwa and Central Proteina positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Darma Henwa position performs unexpectedly, Central Proteina 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 Central Proteina will offset losses from the drop in Central Proteina'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 |
| Central Proteina vs. Bakrie Brothers Tbk | Central Proteina vs. Bakrieland Development Tbk | Central Proteina vs. Darma Henwa Tbk | Central Proteina vs. Bakrie Sumatera Plantations |
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 Equity Search module to search for actively traded equities including funds and ETFs from over 30 global markets.
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