Correlation Between PT Dafam and Batavia Prosperindo
Can any of the company-specific risk be diversified away by investing in both PT Dafam and Batavia Prosperindo 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 Dafam and Batavia Prosperindo into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between PT Dafam Property and Batavia Prosperindo Trans, you can compare the effects of market volatilities on PT Dafam and Batavia Prosperindo 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 Dafam with a short position of Batavia Prosperindo. Check out your portfolio center. Please also check ongoing floating volatility patterns of PT Dafam and Batavia Prosperindo.
Diversification Opportunities for PT Dafam and Batavia Prosperindo
-0.29 | Correlation Coefficient |
Very good diversification
The 3 months correlation between DFAM and Batavia is -0.29. Overlapping area represents the amount of risk that can be diversified away by holding PT Dafam Property and Batavia Prosperindo Trans in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Batavia Prosperindo Trans and PT Dafam 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 Dafam Property are associated (or correlated) with Batavia Prosperindo. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Batavia Prosperindo Trans has no effect on the direction of PT Dafam i.e., PT Dafam and Batavia Prosperindo go up and down completely randomly.
Pair Corralation between PT Dafam and Batavia Prosperindo
Assuming the 90 days trading horizon PT Dafam is expected to generate 3.84 times less return on investment than Batavia Prosperindo. But when comparing it to its historical volatility, PT Dafam Property is 1.52 times less risky than Batavia Prosperindo. It trades about 0.01 of its potential returns per unit of risk. Batavia Prosperindo Trans is currently generating about 0.01 of returns per unit of risk over similar time horizon. If you would invest 8,200 in Batavia Prosperindo Trans on September 2, 2024 and sell it today you would earn a total of 100.00 from holding Batavia Prosperindo Trans or generate 1.22% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
PT Dafam Property vs. Batavia Prosperindo Trans
Performance |
| Timeline |
| PT Dafam Property |
| Batavia Prosperindo Trans |
PT Dafam and Batavia Prosperindo Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with PT Dafam and Batavia Prosperindo
The main advantage of trading using opposite PT Dafam and Batavia Prosperindo positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if PT Dafam position performs unexpectedly, Batavia Prosperindo 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 Batavia Prosperindo will offset losses from the drop in Batavia Prosperindo's long position.| PT Dafam vs. Batavia Prosperindo Trans | PT Dafam vs. MD Pictures Tbk | PT Dafam vs. Bintang Oto Global | PT Dafam vs. Arkadia Digital Media |
| Batavia Prosperindo vs. PT Trimuda Nuansa | Batavia Prosperindo vs. Adi Sarana Armada | Batavia Prosperindo vs. Weha Transportasi Indonesia | Batavia Prosperindo vs. Blue Bird Tbk |
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 Investing Opportunities module to build portfolios using our predefined set of ideas and optimize them against your investing preferences.
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