Correlation Between PT Dewi and PT Arkora

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Can any of the company-specific risk be diversified away by investing in both PT Dewi and PT Arkora 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 PT Dewi and PT Arkora into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between PT Dewi Shri and PT Arkora Hydro, you can compare the effects of market volatilities on PT Dewi and PT Arkora 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 PT Dewi with a short position of PT Arkora. Check out your portfolio center. Please also check ongoing floating volatility patterns of PT Dewi and PT Arkora.

Diversification Opportunities for PT Dewi and PT Arkora

0.0
  Correlation Coefficient

Pay attention - limited upside

The 3 months correlation between DEWI and ARKO is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding PT Dewi Shri and PT Arkora Hydro in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on PT Arkora Hydro and PT Dewi 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 PT Dewi Shri are associated (or correlated) with PT Arkora. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of PT Arkora Hydro has no effect on the direction of PT Dewi i.e., PT Dewi and PT Arkora go up and down completely randomly.

Pair Corralation between PT Dewi and PT Arkora

If you would invest  8,400  in PT Dewi Shri on September 2, 2024 and sell it today you would earn a total of  0.00  from holding PT Dewi Shri or generate 0.0% return on investment over 90 days.
Time Period3 Months [change]
DirectionFlat 
StrengthInsignificant
Accuracy0.0%
ValuesDaily Returns

PT Dewi Shri  vs.  PT Arkora Hydro

 Performance 
       Timeline  
PT Dewi Shri 

Risk-Adjusted Performance

7 of 100

 
Weak
 
Strong
OK
Compared to the overall equity markets, risk-adjusted returns on investments in PT Dewi Shri are ranked lower than 7 (%) of all global equities and portfolios over the last 90 days. Despite quite conflicting forward-looking signals, PT Dewi disclosed solid returns over the last few months and may actually be approaching a breakup point.
PT Arkora Hydro 

Risk-Adjusted Performance

0 of 100

 
Weak
 
Strong
Very Weak
Over the last 90 days PT Arkora Hydro has generated negative risk-adjusted returns adding no value to investors with long positions. Despite quite persistent forward-looking signals, PT Arkora is not utilizing all of its potentials. The current stock price mess, may contribute to short-term losses for the institutional investors.

PT Dewi and PT Arkora Volatility Contrast

   Predicted Return Density   
       Returns  

Pair Trading with PT Dewi and PT Arkora

The main advantage of trading using opposite PT Dewi and PT Arkora positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if PT Dewi position performs unexpectedly, PT Arkora 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 PT Arkora will offset losses from the drop in PT Arkora's long position.
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The idea behind PT Dewi Shri and PT Arkora Hydro pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.
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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 Manager module to state of the art Portfolio Manager to monitor and improve performance of your invested capital.

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