Correlation Between Dharma Satya and Buyung Poetra
Can any of the company-specific risk be diversified away by investing in both Dharma Satya and Buyung Poetra 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 Satya and Buyung Poetra into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Dharma Satya Nusantara and Buyung Poetra Sembada, you can compare the effects of market volatilities on Dharma Satya and Buyung Poetra 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 Satya with a short position of Buyung Poetra. Check out your portfolio center. Please also check ongoing floating volatility patterns of Dharma Satya and Buyung Poetra.
Diversification Opportunities for Dharma Satya and Buyung Poetra
-0.43 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Dharma and Buyung is -0.43. Overlapping area represents the amount of risk that can be diversified away by holding Dharma Satya Nusantara and Buyung Poetra Sembada in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Buyung Poetra Sembada and Dharma Satya 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 Satya Nusantara are associated (or correlated) with Buyung Poetra. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Buyung Poetra Sembada has no effect on the direction of Dharma Satya i.e., Dharma Satya and Buyung Poetra go up and down completely randomly.
Pair Corralation between Dharma Satya and Buyung Poetra
Assuming the 90 days trading horizon Dharma Satya Nusantara is expected to under-perform the Buyung Poetra. But the stock apears to be less risky and, when comparing its historical volatility, Dharma Satya Nusantara is 1.58 times less risky than Buyung Poetra. The stock trades about -0.22 of its potential returns per unit of risk. The Buyung Poetra Sembada is currently generating about 0.18 of returns per unit of risk over similar time horizon. If you would invest 9,700 in Buyung Poetra Sembada on September 18, 2024 and sell it today you would earn a total of 1,800 from holding Buyung Poetra Sembada or generate 18.56% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Dharma Satya Nusantara vs. Buyung Poetra Sembada
Performance |
| Timeline |
| Dharma Satya Nusantara |
| Buyung Poetra Sembada |
Dharma Satya and Buyung Poetra Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Dharma Satya and Buyung Poetra
The main advantage of trading using opposite Dharma Satya and Buyung Poetra positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Dharma Satya position performs unexpectedly, Buyung Poetra 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 Buyung Poetra will offset losses from the drop in Buyung Poetra's long position.| Dharma Satya vs. Salim Ivomas Pratama | Dharma Satya vs. Sawit Sumbermas Sarana | Dharma Satya vs. Austindo Nusantara Jaya | Dharma Satya vs. Eagle High Plantations |
| Buyung Poetra vs. Austindo Nusantara Jaya | Buyung Poetra vs. Garudafood Putra Putri | Buyung Poetra vs. Provident Agro Tbk | Buyung Poetra vs. Dharma Satya Nusantara |
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 Options Analysis module to analyze and evaluate options and option chains as a potential hedge for your portfolios.
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