Correlation Between Diagnos Laboratorium and Cahayaputra Asa
Can any of the company-specific risk be diversified away by investing in both Diagnos Laboratorium and Cahayaputra Asa 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 Diagnos Laboratorium and Cahayaputra Asa into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Diagnos Laboratorium Utama and Cahayaputra Asa Keramik, you can compare the effects of market volatilities on Diagnos Laboratorium and Cahayaputra Asa 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 Diagnos Laboratorium with a short position of Cahayaputra Asa. Check out your portfolio center. Please also check ongoing floating volatility patterns of Diagnos Laboratorium and Cahayaputra Asa.
Diversification Opportunities for Diagnos Laboratorium and Cahayaputra Asa
0.82 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Diagnos and Cahayaputra is 0.82. Overlapping area represents the amount of risk that can be diversified away by holding Diagnos Laboratorium Utama and Cahayaputra Asa Keramik in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Cahayaputra Asa Keramik and Diagnos Laboratorium 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 Diagnos Laboratorium Utama are associated (or correlated) with Cahayaputra Asa. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Cahayaputra Asa Keramik has no effect on the direction of Diagnos Laboratorium i.e., Diagnos Laboratorium and Cahayaputra Asa go up and down completely randomly.
Pair Corralation between Diagnos Laboratorium and Cahayaputra Asa
Assuming the 90 days trading horizon Diagnos Laboratorium Utama is expected to generate 1.46 times more return on investment than Cahayaputra Asa. However, Diagnos Laboratorium is 1.46 times more volatile than Cahayaputra Asa Keramik. It trades about 0.1 of its potential returns per unit of risk. Cahayaputra Asa Keramik is currently generating about 0.06 per unit of risk. If you would invest 14,100 in Diagnos Laboratorium Utama on January 23, 2025 and sell it today you would earn a total of 900.00 from holding Diagnos Laboratorium Utama or generate 6.38% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Diagnos Laboratorium Utama vs. Cahayaputra Asa Keramik
Performance |
| Timeline |
| Diagnos Laboratorium |
| Cahayaputra Asa Keramik |
Diagnos Laboratorium and Cahayaputra Asa Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Diagnos Laboratorium and Cahayaputra Asa
The main advantage of trading using opposite Diagnos Laboratorium and Cahayaputra Asa positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Diagnos Laboratorium position performs unexpectedly, Cahayaputra Asa 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 Cahayaputra Asa will offset losses from the drop in Cahayaputra Asa's long position.| Diagnos Laboratorium vs. Prodia Widyahusada Tbk | Diagnos Laboratorium vs. Medikaloka Hermina PT | Diagnos Laboratorium vs. Itama Ranoraya | Diagnos Laboratorium vs. Digital Mediatama Maxima |
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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 Insider Screener module to find insiders across different sectors to evaluate their impact on performance.
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