Correlation Between Darma Henwa and Putra Mandiri
Can any of the company-specific risk be diversified away by investing in both Darma Henwa and Putra Mandiri 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 Putra Mandiri 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 Putra Mandiri Jembar, you can compare the effects of market volatilities on Darma Henwa and Putra Mandiri 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 Putra Mandiri. Check out your portfolio center. Please also check ongoing floating volatility patterns of Darma Henwa and Putra Mandiri.
Diversification Opportunities for Darma Henwa and Putra Mandiri
-0.52 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Darma and Putra is -0.52. Overlapping area represents the amount of risk that can be diversified away by holding Darma Henwa Tbk and Putra Mandiri Jembar in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Putra Mandiri Jembar 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 Putra Mandiri. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Putra Mandiri Jembar has no effect on the direction of Darma Henwa i.e., Darma Henwa and Putra Mandiri go up and down completely randomly.
Pair Corralation between Darma Henwa and Putra Mandiri
Assuming the 90 days trading horizon Darma Henwa Tbk is expected to generate 1.66 times more return on investment than Putra Mandiri. However, Darma Henwa is 1.66 times more volatile than Putra Mandiri Jembar. It trades about 0.12 of its potential returns per unit of risk. Putra Mandiri Jembar is currently generating about -0.14 per unit of risk. If you would invest 9,300 in Darma Henwa Tbk on September 1, 2024 and sell it today you would earn a total of 1,300 from holding Darma Henwa Tbk or generate 13.98% 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. Putra Mandiri Jembar
Performance |
| Timeline |
| Darma Henwa Tbk |
| Putra Mandiri Jembar |
Darma Henwa and Putra Mandiri Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Darma Henwa and Putra Mandiri
The main advantage of trading using opposite Darma Henwa and Putra Mandiri positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Darma Henwa position performs unexpectedly, Putra Mandiri 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 Putra Mandiri will offset losses from the drop in Putra Mandiri'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 |
| Putra Mandiri vs. Adaro Minerals Indonesia | Putra Mandiri vs. Dharma Polimetal Tbk | Putra Mandiri vs. Wir Asia Tbk | Putra Mandiri vs. Adi Sarana Armada |
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 Balance Of Power module to check stock momentum by analyzing Balance Of Power indicator and other technical ratios.
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