Correlation Between Dharma Polimetal and Pertamina Geothermal
Can any of the company-specific risk be diversified away by investing in both Dharma Polimetal and Pertamina Geothermal 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 Dharma Polimetal and Pertamina Geothermal into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Dharma Polimetal Tbk and Pertamina Geothermal Energy, you can compare the effects of market volatilities on Dharma Polimetal and Pertamina Geothermal 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 Dharma Polimetal with a short position of Pertamina Geothermal. Check out your portfolio center. Please also check ongoing floating volatility patterns of Dharma Polimetal and Pertamina Geothermal.
Diversification Opportunities for Dharma Polimetal and Pertamina Geothermal
0.81 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Dharma and Pertamina is 0.81. Overlapping area represents the amount of risk that can be diversified away by holding Dharma Polimetal Tbk and Pertamina Geothermal Energy in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Pertamina Geothermal and Dharma Polimetal 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 Dharma Polimetal Tbk are associated (or correlated) with Pertamina Geothermal. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Pertamina Geothermal has no effect on the direction of Dharma Polimetal i.e., Dharma Polimetal and Pertamina Geothermal go up and down completely randomly.
Pair Corralation between Dharma Polimetal and Pertamina Geothermal
Assuming the 90 days trading horizon Dharma Polimetal Tbk is expected to generate 0.82 times more return on investment than Pertamina Geothermal. However, Dharma Polimetal Tbk is 1.22 times less risky than Pertamina Geothermal. It trades about -0.13 of its potential returns per unit of risk. Pertamina Geothermal Energy is currently generating about -0.28 per unit of risk. If you would invest 104,500 in Dharma Polimetal Tbk on September 1, 2024 and sell it today you would lose (4,000) from holding Dharma Polimetal Tbk or give up 3.83% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Dharma Polimetal Tbk vs. Pertamina Geothermal Energy
Performance |
| Timeline |
| Dharma Polimetal Tbk |
| Pertamina Geothermal |
Dharma Polimetal and Pertamina Geothermal Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Dharma Polimetal and Pertamina Geothermal
The main advantage of trading using opposite Dharma Polimetal and Pertamina Geothermal positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Dharma Polimetal position performs unexpectedly, Pertamina Geothermal 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 Pertamina Geothermal will offset losses from the drop in Pertamina Geothermal's long position.| Dharma Polimetal vs. Triputra Agro Persada | Dharma Polimetal vs. Autopedia Sukses Lestari | Dharma Polimetal vs. Cisarua Mountain Dairy | Dharma Polimetal vs. Surya Esa Perkasa |
| Pertamina Geothermal vs. Ashmore Asset Management | Pertamina Geothermal vs. HK Metals Utama | Pertamina Geothermal vs. Lotte Chemical Titan | Pertamina Geothermal 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 Equity Search module to search for actively traded equities including funds and ETFs from over 30 global markets.
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