Correlation Between Indoritel Makmur and Dian Swastatika
Can any of the company-specific risk be diversified away by investing in both Indoritel Makmur and Dian Swastatika 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 Indoritel Makmur and Dian Swastatika into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Indoritel Makmur Internasional and Dian Swastatika Sentosa, you can compare the effects of market volatilities on Indoritel Makmur and Dian Swastatika 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 Indoritel Makmur with a short position of Dian Swastatika. Check out your portfolio center. Please also check ongoing floating volatility patterns of Indoritel Makmur and Dian Swastatika.
Diversification Opportunities for Indoritel Makmur and Dian Swastatika
-0.15 | Correlation Coefficient |
Good diversification
The 3 months correlation between Indoritel and Dian is -0.15. Overlapping area represents the amount of risk that can be diversified away by holding Indoritel Makmur Internasional and Dian Swastatika Sentosa in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Dian Swastatika Sentosa and Indoritel Makmur 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 Indoritel Makmur Internasional are associated (or correlated) with Dian Swastatika. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Dian Swastatika Sentosa has no effect on the direction of Indoritel Makmur i.e., Indoritel Makmur and Dian Swastatika go up and down completely randomly.
Pair Corralation between Indoritel Makmur and Dian Swastatika
Assuming the 90 days trading horizon Indoritel Makmur Internasional is expected to generate 0.48 times more return on investment than Dian Swastatika. However, Indoritel Makmur Internasional is 2.07 times less risky than Dian Swastatika. It trades about 0.06 of its potential returns per unit of risk. Dian Swastatika Sentosa is currently generating about -0.17 per unit of risk. If you would invest 915,000 in Indoritel Makmur Internasional on November 28, 2024 and sell it today you would earn a total of 22,500 from holding Indoritel Makmur Internasional or generate 2.46% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 95.0% |
| Values | Daily Returns |
Indoritel Makmur Internasional vs. Dian Swastatika Sentosa
Performance |
| Timeline |
| Indoritel Makmur Int |
| Dian Swastatika Sentosa |
Risk-Adjusted Performance
Very Weak
Weak | Strong |
Indoritel Makmur and Dian Swastatika Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Indoritel Makmur and Dian Swastatika
The main advantage of trading using opposite Indoritel Makmur and Dian Swastatika positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Indoritel Makmur position performs unexpectedly, Dian Swastatika 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 Dian Swastatika will offset losses from the drop in Dian Swastatika's long position.| Indoritel Makmur vs. Fast Food Indonesia | Indoritel Makmur vs. Centratama Telekomunikasi Ind | Indoritel Makmur vs. Sumber Alfaria Trijaya | Indoritel Makmur vs. Bayu Buana Tbk |
| Dian Swastatika vs. Bayan Resources Tbk | Dian Swastatika vs. Indoritel Makmur Internasional | Dian Swastatika vs. Duta Pertiwi Tbk | Dian Swastatika vs. Enseval Putra Megatrading |
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 Risk-Return Analysis module to view associations between returns expected from investment and the risk you assume.
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