Correlation Between Diamond Food and Lini Imaji
Can any of the company-specific risk be diversified away by investing in both Diamond Food and Lini Imaji 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 Diamond Food and Lini Imaji into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Diamond Food Indonesia and Lini Imaji Kreasi, you can compare the effects of market volatilities on Diamond Food and Lini Imaji 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 Diamond Food with a short position of Lini Imaji. Check out your portfolio center. Please also check ongoing floating volatility patterns of Diamond Food and Lini Imaji.
Diversification Opportunities for Diamond Food and Lini Imaji
-0.1 | Correlation Coefficient |
Good diversification
The 3 months correlation between Diamond and Lini is -0.1. Overlapping area represents the amount of risk that can be diversified away by holding Diamond Food Indonesia and Lini Imaji Kreasi in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Lini Imaji Kreasi and Diamond Food 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 Diamond Food Indonesia are associated (or correlated) with Lini Imaji. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Lini Imaji Kreasi has no effect on the direction of Diamond Food i.e., Diamond Food and Lini Imaji go up and down completely randomly.
Pair Corralation between Diamond Food and Lini Imaji
Assuming the 90 days trading horizon Diamond Food Indonesia is expected to under-perform the Lini Imaji. But the stock apears to be less risky and, when comparing its historical volatility, Diamond Food Indonesia is 9.09 times less risky than Lini Imaji. The stock trades about -0.07 of its potential returns per unit of risk. The Lini Imaji Kreasi is currently generating about 0.19 of returns per unit of risk over similar time horizon. If you would invest 7,700 in Lini Imaji Kreasi on September 2, 2024 and sell it today you would earn a total of 2,700 from holding Lini Imaji Kreasi or generate 35.06% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Diamond Food Indonesia vs. Lini Imaji Kreasi
Performance |
| Timeline |
| Diamond Food Indonesia |
| Lini Imaji Kreasi |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Solid
Diamond Food and Lini Imaji Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Diamond Food and Lini Imaji
The main advantage of trading using opposite Diamond Food and Lini Imaji positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Diamond Food position performs unexpectedly, Lini Imaji 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 Lini Imaji will offset losses from the drop in Lini Imaji's long position.| Diamond Food vs. Garudafood Putra Putri | Diamond Food vs. Estika Tata Tiara | Diamond Food vs. Campina Ice Cream | Diamond Food vs. PT Wahana Interfood |
| Lini Imaji vs. Trinitan Metals and | Lini Imaji vs. Tridomain Performance Materials | Lini Imaji vs. Weha Transportasi Indonesia | Lini Imaji vs. PT Homeco Victoria |
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 USA ETFs module to find actively traded Exchange Traded Funds (ETF) in USA.
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