Correlation Between Dharma Polimetal and PT Boston
Can any of the company-specific risk be diversified away by investing in both Dharma Polimetal and PT Boston 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 PT Boston 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 PT Boston Furniture, you can compare the effects of market volatilities on Dharma Polimetal and PT Boston 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 PT Boston. Check out your portfolio center. Please also check ongoing floating volatility patterns of Dharma Polimetal and PT Boston.
Diversification Opportunities for Dharma Polimetal and PT Boston
-0.58 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Dharma and SOFA is -0.58. Overlapping area represents the amount of risk that can be diversified away by holding Dharma Polimetal Tbk and PT Boston Furniture in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on PT Boston Furniture 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 PT Boston. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of PT Boston Furniture has no effect on the direction of Dharma Polimetal i.e., Dharma Polimetal and PT Boston go up and down completely randomly.
Pair Corralation between Dharma Polimetal and PT Boston
Assuming the 90 days trading horizon Dharma Polimetal Tbk is expected to under-perform the PT Boston. But the stock apears to be less risky and, when comparing its historical volatility, Dharma Polimetal Tbk is 3.35 times less risky than PT Boston. The stock trades about -0.13 of its potential returns per unit of risk. The PT Boston Furniture is currently generating about 0.71 of returns per unit of risk over similar time horizon. If you would invest 1,900 in PT Boston Furniture on September 1, 2024 and sell it today you would earn a total of 1,700 from holding PT Boston Furniture or generate 89.47% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Dharma Polimetal Tbk vs. PT Boston Furniture
Performance |
| Timeline |
| Dharma Polimetal Tbk |
| PT Boston Furniture |
Dharma Polimetal and PT Boston Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Dharma Polimetal and PT Boston
The main advantage of trading using opposite Dharma Polimetal and PT Boston positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Dharma Polimetal position performs unexpectedly, PT Boston 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 Boston will offset losses from the drop in PT Boston'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 |
| PT Boston vs. Pt Pakuan Tbk | PT Boston vs. Integra Indocabinet Tbk | PT Boston vs. Multistrada Arah Sarana | PT Boston vs. PT MNC Energy |
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 Bollinger Bands module to use Bollinger Bands indicator to analyze target price for a given investing horizon.
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