Correlation Between PT Dewi and PT Sari
Can any of the company-specific risk be diversified away by investing in both PT Dewi and PT Sari 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 Sari 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 Sari Kreasi, you can compare the effects of market volatilities on PT Dewi and PT Sari 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 Sari. Check out your portfolio center. Please also check ongoing floating volatility patterns of PT Dewi and PT Sari.
Diversification Opportunities for PT Dewi and PT Sari
Significant diversification
The 3 months correlation between DEWI and RAFI is 0.03. Overlapping area represents the amount of risk that can be diversified away by holding PT Dewi Shri and PT Sari Kreasi in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on PT Sari Kreasi 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 Sari. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of PT Sari Kreasi has no effect on the direction of PT Dewi i.e., PT Dewi and PT Sari go up and down completely randomly.
Pair Corralation between PT Dewi and PT Sari
Assuming the 90 days trading horizon PT Dewi Shri is expected to under-perform the PT Sari. But the stock apears to be less risky and, when comparing its historical volatility, PT Dewi Shri is 2.34 times less risky than PT Sari. The stock trades about -0.03 of its potential returns per unit of risk. The PT Sari Kreasi is currently generating about 0.11 of returns per unit of risk over similar time horizon. If you would invest 2,500 in PT Sari Kreasi on August 28, 2024 and sell it today you would earn a total of 500.00 from holding PT Sari Kreasi or generate 20.0% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
PT Dewi Shri vs. PT Sari Kreasi
Performance |
| Timeline |
| PT Dewi Shri |
| PT Sari Kreasi |
PT Dewi and PT Sari Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with PT Dewi and PT Sari
The main advantage of trading using opposite PT Dewi and PT Sari positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if PT Dewi position performs unexpectedly, PT Sari 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 Sari will offset losses from the drop in PT Sari's long position.| PT Dewi vs. Dharma Satya Nusantara | PT Dewi vs. Saratoga Investama Sedaya | PT Dewi vs. Surya Esa Perkasa | PT Dewi vs. Elang Mahkota Teknologi |
| PT Sari vs. PT Dewi Shri | PT Sari vs. Bangun Karya Perkasa | PT Sari vs. Gaya Abadi Sempurna | PT Sari vs. Habco Trans Maritima |
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 Pair Correlation module to compare performance and examine fundamental relationship between any two equity instruments.
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