Correlation Between Diagnos Laboratorium and PAM Mineral
Can any of the company-specific risk be diversified away by investing in both Diagnos Laboratorium and PAM Mineral 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 PAM Mineral 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 PAM Mineral Tbk, you can compare the effects of market volatilities on Diagnos Laboratorium and PAM Mineral 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 PAM Mineral. Check out your portfolio center. Please also check ongoing floating volatility patterns of Diagnos Laboratorium and PAM Mineral.
Diversification Opportunities for Diagnos Laboratorium and PAM Mineral
-0.05 | Correlation Coefficient |
Good diversification
The 3 months correlation between Diagnos and PAM is -0.05. Overlapping area represents the amount of risk that can be diversified away by holding Diagnos Laboratorium Utama and PAM Mineral Tbk in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on PAM Mineral Tbk 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 PAM Mineral. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of PAM Mineral Tbk has no effect on the direction of Diagnos Laboratorium i.e., Diagnos Laboratorium and PAM Mineral go up and down completely randomly.
Pair Corralation between Diagnos Laboratorium and PAM Mineral
Assuming the 90 days trading horizon Diagnos Laboratorium is expected to generate 12.05 times less return on investment than PAM Mineral. But when comparing it to its historical volatility, Diagnos Laboratorium Utama is 1.2 times less risky than PAM Mineral. It trades about 0.01 of its potential returns per unit of risk. PAM Mineral Tbk is currently generating about 0.11 of returns per unit of risk over similar time horizon. If you would invest 17,929 in PAM Mineral Tbk on August 29, 2024 and sell it today you would earn a total of 12,671 from holding PAM Mineral Tbk or generate 70.67% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Diagnos Laboratorium Utama vs. PAM Mineral Tbk
Performance |
| Timeline |
| Diagnos Laboratorium |
| PAM Mineral Tbk |
Diagnos Laboratorium and PAM Mineral Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Diagnos Laboratorium and PAM Mineral
The main advantage of trading using opposite Diagnos Laboratorium and PAM Mineral positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Diagnos Laboratorium position performs unexpectedly, PAM Mineral 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 PAM Mineral will offset losses from the drop in PAM Mineral's long position.| Diagnos Laboratorium vs. Prodia Widyahusada Tbk | Diagnos Laboratorium vs. Medikaloka Hermina PT | Diagnos Laboratorium vs. Digital Mediatama Maxima | Diagnos Laboratorium vs. Integra Indocabinet Tbk |
| PAM Mineral vs. Archi Indonesia Tbk | PAM Mineral vs. Bumi Resources Minerals | PAM Mineral vs. Bank Panin Syariah | PAM Mineral vs. Central Omega Resources |
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 Earnings Calls module to check upcoming earnings announcements updated hourly across public exchanges.
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