Correlation Between Dian Swastatika and Ace Oldfields
Can any of the company-specific risk be diversified away by investing in both Dian Swastatika and Ace Oldfields 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 Dian Swastatika and Ace Oldfields into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Dian Swastatika Sentosa and Ace Oldfields PT, you can compare the effects of market volatilities on Dian Swastatika and Ace Oldfields 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 Dian Swastatika with a short position of Ace Oldfields. Check out your portfolio center. Please also check ongoing floating volatility patterns of Dian Swastatika and Ace Oldfields.
Diversification Opportunities for Dian Swastatika and Ace Oldfields
0.67 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Dian and Ace is 0.67. Overlapping area represents the amount of risk that can be diversified away by holding Dian Swastatika Sentosa and Ace Oldfields PT in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Ace Oldfields PT and Dian Swastatika 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 Dian Swastatika Sentosa are associated (or correlated) with Ace Oldfields. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Ace Oldfields PT has no effect on the direction of Dian Swastatika i.e., Dian Swastatika and Ace Oldfields go up and down completely randomly.
Pair Corralation between Dian Swastatika and Ace Oldfields
Assuming the 90 days trading horizon Dian Swastatika Sentosa is expected to under-perform the Ace Oldfields. In addition to that, Dian Swastatika is 1.56 times more volatile than Ace Oldfields PT. It trades about -0.28 of its total potential returns per unit of risk. Ace Oldfields PT is currently generating about -0.18 per unit of volatility. If you would invest 5,400 in Ace Oldfields PT on August 30, 2024 and sell it today you would lose (400.00) from holding Ace Oldfields PT or give up 7.41% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Dian Swastatika Sentosa vs. Ace Oldfields PT
Performance |
| Timeline |
| Dian Swastatika Sentosa |
| Ace Oldfields PT |
Dian Swastatika and Ace Oldfields Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Dian Swastatika and Ace Oldfields
The main advantage of trading using opposite Dian Swastatika and Ace Oldfields positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Dian Swastatika position performs unexpectedly, Ace Oldfields 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 Ace Oldfields will offset losses from the drop in Ace Oldfields' long position.| Dian Swastatika vs. Bayan Resources Tbk | Dian Swastatika vs. Indoritel Makmur Internasional | Dian Swastatika vs. Duta Pertiwi Tbk | Dian Swastatika vs. Enseval Putra Megatrading |
| Ace Oldfields vs. Ladangbaja Murni PT | Ace Oldfields vs. PT Hasnur Internasional | Ace Oldfields vs. Geoprima Solusi Tbk | Ace Oldfields vs. Prima Andalan Mandiri |
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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