Correlation Between Delta Dunia and Pelat Timah
Can any of the company-specific risk be diversified away by investing in both Delta Dunia and Pelat Timah 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 Delta Dunia and Pelat Timah into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Delta Dunia Makmur and Pelat Timah Nusantara, you can compare the effects of market volatilities on Delta Dunia and Pelat Timah 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 Delta Dunia with a short position of Pelat Timah. Check out your portfolio center. Please also check ongoing floating volatility patterns of Delta Dunia and Pelat Timah.
Diversification Opportunities for Delta Dunia and Pelat Timah
-0.25 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Delta and Pelat is -0.25. Overlapping area represents the amount of risk that can be diversified away by holding Delta Dunia Makmur and Pelat Timah Nusantara in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Pelat Timah Nusantara and Delta Dunia 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 Delta Dunia Makmur are associated (or correlated) with Pelat Timah. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Pelat Timah Nusantara has no effect on the direction of Delta Dunia i.e., Delta Dunia and Pelat Timah go up and down completely randomly.
Pair Corralation between Delta Dunia and Pelat Timah
Assuming the 90 days trading horizon Delta Dunia Makmur is expected to generate 0.82 times more return on investment than Pelat Timah. However, Delta Dunia Makmur is 1.22 times less risky than Pelat Timah. It trades about 0.06 of its potential returns per unit of risk. Pelat Timah Nusantara is currently generating about -0.01 per unit of risk. If you would invest 56,427 in Delta Dunia Makmur on August 31, 2024 and sell it today you would earn a total of 11,073 from holding Delta Dunia Makmur or generate 19.62% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Delta Dunia Makmur vs. Pelat Timah Nusantara
Performance |
| Timeline |
| Delta Dunia Makmur |
| Pelat Timah Nusantara |
Delta Dunia and Pelat Timah Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Delta Dunia and Pelat Timah
The main advantage of trading using opposite Delta Dunia and Pelat Timah positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Delta Dunia position performs unexpectedly, Pelat Timah 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 Pelat Timah will offset losses from the drop in Pelat Timah's long position.| Delta Dunia vs. Indika Energy Tbk | Delta Dunia vs. Elnusa Tbk | Delta Dunia vs. Harum Energy Tbk | Delta Dunia vs. Energi Mega Persada |
| Pelat Timah vs. Krakatau Steel Persero | Pelat Timah vs. Delta Dunia Makmur | Pelat Timah vs. Semen Baturaja Persero | Pelat Timah vs. Indofarma Tbk |
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 Performance Analysis module to check effects of mean-variance optimization against your current asset allocation.
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