Correlation Between Diamond Food and Mulia Boga
Can any of the company-specific risk be diversified away by investing in both Diamond Food and Mulia Boga 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 Mulia Boga 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 Mulia Boga Raya, you can compare the effects of market volatilities on Diamond Food and Mulia Boga 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 Mulia Boga. Check out your portfolio center. Please also check ongoing floating volatility patterns of Diamond Food and Mulia Boga.
Diversification Opportunities for Diamond Food and Mulia Boga
0.09 | Correlation Coefficient |
Significant diversification
The 3 months correlation between Diamond and Mulia is 0.09. Overlapping area represents the amount of risk that can be diversified away by holding Diamond Food Indonesia and Mulia Boga Raya in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Mulia Boga Raya 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 Mulia Boga. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Mulia Boga Raya has no effect on the direction of Diamond Food i.e., Diamond Food and Mulia Boga go up and down completely randomly.
Pair Corralation between Diamond Food and Mulia Boga
Assuming the 90 days trading horizon Diamond Food Indonesia is expected to under-perform the Mulia Boga. But the stock apears to be less risky and, when comparing its historical volatility, Diamond Food Indonesia is 2.22 times less risky than Mulia Boga. The stock trades about 0.0 of its potential returns per unit of risk. The Mulia Boga Raya is currently generating about 0.04 of returns per unit of risk over similar time horizon. If you would invest 125,787 in Mulia Boga Raya on August 30, 2024 and sell it today you would earn a total of 43,213 from holding Mulia Boga Raya or generate 34.35% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Diamond Food Indonesia vs. Mulia Boga Raya
Performance |
| Timeline |
| Diamond Food Indonesia |
| Mulia Boga Raya |
Diamond Food and Mulia Boga Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Diamond Food and Mulia Boga
The main advantage of trading using opposite Diamond Food and Mulia Boga positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Diamond Food position performs unexpectedly, Mulia Boga 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 Mulia Boga will offset losses from the drop in Mulia Boga's long position.| Diamond Food vs. Garudafood Putra Putri | Diamond Food vs. Campina Ice Cream | Diamond Food vs. Uni Charm Indonesia | Diamond Food vs. Sariguna Primatirta PT |
| Mulia Boga vs. Garudafood Putra Putri | Mulia Boga vs. Uni Charm Indonesia | Mulia Boga vs. Campina Ice Cream | Mulia Boga vs. Mitrabara Adiperdana PT |
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 Equity Search module to search for actively traded equities including funds and ETFs from over 30 global markets.
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