Correlation Between Darma Henwa and Ifishdeco
Can any of the company-specific risk be diversified away by investing in both Darma Henwa and Ifishdeco 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 Ifishdeco 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 Ifishdeco PT, you can compare the effects of market volatilities on Darma Henwa and Ifishdeco 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 Ifishdeco. Check out your portfolio center. Please also check ongoing floating volatility patterns of Darma Henwa and Ifishdeco.
Diversification Opportunities for Darma Henwa and Ifishdeco
-0.55 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Darma and Ifishdeco is -0.55. Overlapping area represents the amount of risk that can be diversified away by holding Darma Henwa Tbk and Ifishdeco PT in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Ifishdeco PT 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 Ifishdeco. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Ifishdeco PT has no effect on the direction of Darma Henwa i.e., Darma Henwa and Ifishdeco go up and down completely randomly.
Pair Corralation between Darma Henwa and Ifishdeco
Assuming the 90 days trading horizon Darma Henwa Tbk is expected to generate 1.27 times more return on investment than Ifishdeco. However, Darma Henwa is 1.27 times more volatile than Ifishdeco PT. It trades about 0.13 of its potential returns per unit of risk. Ifishdeco PT is currently generating about 0.0 per unit of risk. If you would invest 6,200 in Darma Henwa Tbk on August 29, 2024 and sell it today you would earn a total of 5,200 from holding Darma Henwa Tbk or generate 83.87% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Darma Henwa Tbk vs. Ifishdeco PT
Performance |
| Timeline |
| Darma Henwa Tbk |
| Ifishdeco PT |
Darma Henwa and Ifishdeco Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Darma Henwa and Ifishdeco
The main advantage of trading using opposite Darma Henwa and Ifishdeco positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Darma Henwa position performs unexpectedly, Ifishdeco 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 Ifishdeco will offset losses from the drop in Ifishdeco's long position.| Darma Henwa vs. Barito Pacific Tbk | Darma Henwa vs. Charoen Pokphand Indonesia | Darma Henwa vs. Indocement Tunggal Prakarsa |
| Ifishdeco vs. Gunung Raja Paksi | Ifishdeco vs. Cita Mineral Investindo | Ifishdeco vs. Central Omega Resources | Ifishdeco vs. Indonesia Fibreboard Industry |
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 Backtesting module to avoid under-diversification and over-optimization by backtesting your portfolios.
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