Correlation Between Darma Henwa and Delta Dunia
Can any of the company-specific risk be diversified away by investing in both Darma Henwa and Delta Dunia 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 Delta Dunia 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 Delta Dunia Makmur, you can compare the effects of market volatilities on Darma Henwa and Delta Dunia 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 Delta Dunia. Check out your portfolio center. Please also check ongoing floating volatility patterns of Darma Henwa and Delta Dunia.
Diversification Opportunities for Darma Henwa and Delta Dunia
-0.65 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Darma and Delta is -0.65. Overlapping area represents the amount of risk that can be diversified away by holding Darma Henwa Tbk and Delta Dunia Makmur in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Delta Dunia Makmur 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 Delta Dunia. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Delta Dunia Makmur has no effect on the direction of Darma Henwa i.e., Darma Henwa and Delta Dunia go up and down completely randomly.
Pair Corralation between Darma Henwa and Delta Dunia
Assuming the 90 days trading horizon Darma Henwa Tbk is expected to generate 2.01 times more return on investment than Delta Dunia. However, Darma Henwa is 2.01 times more volatile than Delta Dunia Makmur. It trades about 0.17 of its potential returns per unit of risk. Delta Dunia Makmur is currently generating about 0.09 per unit of risk. If you would invest 9,600 in Darma Henwa Tbk on August 27, 2024 and sell it today you would earn a total of 2,100 from holding Darma Henwa Tbk or generate 21.88% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Darma Henwa Tbk vs. Delta Dunia Makmur
Performance |
| Timeline |
| Darma Henwa Tbk |
| Delta Dunia Makmur |
Darma Henwa and Delta Dunia Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Darma Henwa and Delta Dunia
The main advantage of trading using opposite Darma Henwa and Delta Dunia positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Darma Henwa position performs unexpectedly, Delta Dunia 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 Delta Dunia will offset losses from the drop in Delta Dunia'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 |
| Delta Dunia vs. Indika Energy Tbk | Delta Dunia vs. Elnusa Tbk | Delta Dunia vs. Harum Energy Tbk | Delta Dunia 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 Performance Analysis module to check effects of mean-variance optimization against your current asset allocation.
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