Correlation Between Diamond Food and Pt Pradiksi
Can any of the company-specific risk be diversified away by investing in both Diamond Food and Pt Pradiksi 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 Pt Pradiksi 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 Pt Pradiksi Gunatama, you can compare the effects of market volatilities on Diamond Food and Pt Pradiksi 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 Pt Pradiksi. Check out your portfolio center. Please also check ongoing floating volatility patterns of Diamond Food and Pt Pradiksi.
Diversification Opportunities for Diamond Food and Pt Pradiksi
0.24 | Correlation Coefficient |
Modest diversification
The 3 months correlation between Diamond and PGUN is 0.24. Overlapping area represents the amount of risk that can be diversified away by holding Diamond Food Indonesia and Pt Pradiksi Gunatama in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Pt Pradiksi Gunatama 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 Pt Pradiksi. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Pt Pradiksi Gunatama has no effect on the direction of Diamond Food i.e., Diamond Food and Pt Pradiksi go up and down completely randomly.
Pair Corralation between Diamond Food and Pt Pradiksi
Assuming the 90 days trading horizon Diamond Food is expected to generate 2.49 times less return on investment than Pt Pradiksi. In addition to that, Diamond Food is 2.06 times more volatile than Pt Pradiksi Gunatama. It trades about 0.06 of its total potential returns per unit of risk. Pt Pradiksi Gunatama is currently generating about 0.28 per unit of volatility. If you would invest 31,400 in Pt Pradiksi Gunatama on September 13, 2024 and sell it today you would earn a total of 11,000 from holding Pt Pradiksi Gunatama or generate 35.03% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Diamond Food Indonesia vs. Pt Pradiksi Gunatama
Performance |
| Timeline |
| Diamond Food Indonesia |
| Pt Pradiksi Gunatama |
Diamond Food and Pt Pradiksi Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Diamond Food and Pt Pradiksi
The main advantage of trading using opposite Diamond Food and Pt Pradiksi positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Diamond Food position performs unexpectedly, Pt Pradiksi 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 Pt Pradiksi will offset losses from the drop in Pt Pradiksi'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 |
| Pt Pradiksi vs. Mahkota Group Tbk | Pt Pradiksi vs. Palma Serasih PT | Pt Pradiksi vs. Cisadane Sawit Raya | Pt Pradiksi vs. Diamond Food Indonesia |
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 Commodity Channel module to use Commodity Channel Index to analyze current equity momentum.
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