Correlation Between Darma Henwa and Ace Oldfields
Can any of the company-specific risk be diversified away by investing in both Darma Henwa and Ace Oldfields 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 Ace Oldfields 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 Ace Oldfields PT, you can compare the effects of market volatilities on Darma Henwa and Ace Oldfields 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 Ace Oldfields. Check out your portfolio center. Please also check ongoing floating volatility patterns of Darma Henwa and Ace Oldfields.
Diversification Opportunities for Darma Henwa and Ace Oldfields
-0.34 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Darma and Ace is -0.34. Overlapping area represents the amount of risk that can be diversified away by holding Darma Henwa Tbk and Ace Oldfields PT in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Ace Oldfields 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 Ace Oldfields. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Ace Oldfields PT has no effect on the direction of Darma Henwa i.e., Darma Henwa and Ace Oldfields go up and down completely randomly.
Pair Corralation between Darma Henwa and Ace Oldfields
Assuming the 90 days trading horizon Darma Henwa Tbk is expected to generate 2.59 times more return on investment than Ace Oldfields. However, Darma Henwa is 2.59 times more volatile than Ace Oldfields PT. It trades about 0.13 of its potential returns per unit of risk. Ace Oldfields PT is currently generating about 0.01 per unit of risk. If you would invest 5,700 in Darma Henwa Tbk on August 27, 2024 and sell it today you would earn a total of 6,200 from holding Darma Henwa Tbk or generate 108.77% 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. Ace Oldfields PT
Performance |
| Timeline |
| Darma Henwa Tbk |
| Ace Oldfields PT |
Darma Henwa and Ace Oldfields Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Darma Henwa and Ace Oldfields
The main advantage of trading using opposite Darma Henwa and Ace Oldfields positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Darma Henwa position performs unexpectedly, Ace Oldfields 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 Ace Oldfields will offset losses from the drop in Ace Oldfields' 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 |
| Ace Oldfields vs. Ladangbaja Murni PT | Ace Oldfields vs. PT Hasnur Internasional | Ace Oldfields vs. Geoprima Solusi Tbk | Ace Oldfields vs. Prima Andalan Mandiri |
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 Fundamental Analysis module to view fundamental data based on most recent published financial statements.
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