Correlation Between PT Data and Diamond Food
Can any of the company-specific risk be diversified away by investing in both PT Data and Diamond Food 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 PT Data and Diamond Food into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between PT Data Sinergitama and Diamond Food Indonesia, you can compare the effects of market volatilities on PT Data and Diamond Food 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 PT Data with a short position of Diamond Food. Check out your portfolio center. Please also check ongoing floating volatility patterns of PT Data and Diamond Food.
Diversification Opportunities for PT Data and Diamond Food
0.06 | Correlation Coefficient |
Significant diversification
The 3 months correlation between ELIT and Diamond is 0.06. Overlapping area represents the amount of risk that can be diversified away by holding PT Data Sinergitama and Diamond Food Indonesia in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Diamond Food Indonesia and PT Data 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 PT Data Sinergitama are associated (or correlated) with Diamond Food. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Diamond Food Indonesia has no effect on the direction of PT Data i.e., PT Data and Diamond Food go up and down completely randomly.
Pair Corralation between PT Data and Diamond Food
Assuming the 90 days trading horizon PT Data Sinergitama is expected to generate 3.88 times more return on investment than Diamond Food. However, PT Data is 3.88 times more volatile than Diamond Food Indonesia. It trades about 0.03 of its potential returns per unit of risk. Diamond Food Indonesia is currently generating about 0.0 per unit of risk. If you would invest 10,493 in PT Data Sinergitama on August 30, 2024 and sell it today you would earn a total of 1,007 from holding PT Data Sinergitama or generate 9.6% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 95.77% |
| Values | Daily Returns |
PT Data Sinergitama vs. Diamond Food Indonesia
Performance |
| Timeline |
| PT Data Sinergitama |
| Diamond Food Indonesia |
PT Data and Diamond Food Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with PT Data and Diamond Food
The main advantage of trading using opposite PT Data and Diamond Food positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if PT Data position performs unexpectedly, Diamond Food 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 Diamond Food will offset losses from the drop in Diamond Food's long position.| PT Data vs. Ciptadana Asset Management | PT Data vs. Communication Cable Systems | PT Data vs. Media Nusantara Citra | PT Data vs. Indorama Synthetics Tbk |
| Diamond Food vs. Garudafood Putra Putri | Diamond Food vs. Campina Ice Cream | Diamond Food vs. Uni Charm Indonesia | Diamond Food vs. Sariguna Primatirta 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 Money Managers module to screen money managers from public funds and ETFs managed around the world.
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