Correlation Between Indointernet Tbk and DCI Indonesia
Can any of the company-specific risk be diversified away by investing in both Indointernet Tbk and DCI Indonesia 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 Indointernet Tbk and DCI Indonesia into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Indointernet Tbk PT and DCI Indonesia Tbk, you can compare the effects of market volatilities on Indointernet Tbk and DCI Indonesia 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 Indointernet Tbk with a short position of DCI Indonesia. Check out your portfolio center. Please also check ongoing floating volatility patterns of Indointernet Tbk and DCI Indonesia.
Diversification Opportunities for Indointernet Tbk and DCI Indonesia
0.33 | Correlation Coefficient |
Weak diversification
The 3 months correlation between Indointernet and DCI is 0.33. Overlapping area represents the amount of risk that can be diversified away by holding Indointernet Tbk PT and DCI Indonesia Tbk in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on DCI Indonesia Tbk and Indointernet Tbk 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 Indointernet Tbk PT are associated (or correlated) with DCI Indonesia. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of DCI Indonesia Tbk has no effect on the direction of Indointernet Tbk i.e., Indointernet Tbk and DCI Indonesia go up and down completely randomly.
Pair Corralation between Indointernet Tbk and DCI Indonesia
Assuming the 90 days trading horizon Indointernet Tbk is expected to generate 6.53 times less return on investment than DCI Indonesia. But when comparing it to its historical volatility, Indointernet Tbk PT is 1.12 times less risky than DCI Indonesia. It trades about 0.01 of its potential returns per unit of risk. DCI Indonesia Tbk is currently generating about 0.06 of returns per unit of risk over similar time horizon. If you would invest 3,940,000 in DCI Indonesia Tbk on November 3, 2024 and sell it today you would earn a total of 710,000 from holding DCI Indonesia Tbk or generate 18.02% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Indointernet Tbk PT vs. DCI Indonesia Tbk
Performance |
| Timeline |
| Indointernet Tbk |
| DCI Indonesia Tbk |
Indointernet Tbk and DCI Indonesia Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Indointernet Tbk and DCI Indonesia
The main advantage of trading using opposite Indointernet Tbk and DCI Indonesia positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Indointernet Tbk position performs unexpectedly, DCI Indonesia 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 DCI Indonesia will offset losses from the drop in DCI Indonesia's long position.| Indointernet Tbk vs. DCI Indonesia Tbk | Indointernet Tbk vs. Digital Mediatama Maxima | Indointernet Tbk vs. Multipolar Technology Tbk | Indointernet Tbk vs. Bank Net Indonesia |
| DCI Indonesia vs. Multipolar Technology Tbk | DCI Indonesia vs. Digital Mediatama Maxima | DCI Indonesia vs. M Cash Integrasi | DCI Indonesia vs. NFC Indonesia PT |
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 Content Syndication module to quickly integrate customizable finance content to your own investment portal.
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