Correlation Between Alfa Energi and Dayamitra Telekomunikasi
Can any of the company-specific risk be diversified away by investing in both Alfa Energi and Dayamitra Telekomunikasi 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 Alfa Energi and Dayamitra Telekomunikasi into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Alfa Energi Investama and Dayamitra Telekomunikasi PT, you can compare the effects of market volatilities on Alfa Energi and Dayamitra Telekomunikasi 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 Alfa Energi with a short position of Dayamitra Telekomunikasi. Check out your portfolio center. Please also check ongoing floating volatility patterns of Alfa Energi and Dayamitra Telekomunikasi.
Diversification Opportunities for Alfa Energi and Dayamitra Telekomunikasi
0.63 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Alfa and Dayamitra is 0.63. Overlapping area represents the amount of risk that can be diversified away by holding Alfa Energi Investama and Dayamitra Telekomunikasi PT in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Dayamitra Telekomunikasi and Alfa Energi 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 Alfa Energi Investama are associated (or correlated) with Dayamitra Telekomunikasi. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Dayamitra Telekomunikasi has no effect on the direction of Alfa Energi i.e., Alfa Energi and Dayamitra Telekomunikasi go up and down completely randomly.
Pair Corralation between Alfa Energi and Dayamitra Telekomunikasi
Assuming the 90 days trading horizon Alfa Energi Investama is expected to under-perform the Dayamitra Telekomunikasi. In addition to that, Alfa Energi is 1.56 times more volatile than Dayamitra Telekomunikasi PT. It trades about -0.13 of its total potential returns per unit of risk. Dayamitra Telekomunikasi PT is currently generating about -0.05 per unit of volatility. If you would invest 63,000 in Dayamitra Telekomunikasi PT on September 1, 2024 and sell it today you would lose (1,500) from holding Dayamitra Telekomunikasi PT or give up 2.38% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 95.45% |
| Values | Daily Returns |
Alfa Energi Investama vs. Dayamitra Telekomunikasi PT
Performance |
| Timeline |
| Alfa Energi Investama |
| Dayamitra Telekomunikasi |
Alfa Energi and Dayamitra Telekomunikasi Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Alfa Energi and Dayamitra Telekomunikasi
The main advantage of trading using opposite Alfa Energi and Dayamitra Telekomunikasi positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Alfa Energi position performs unexpectedly, Dayamitra Telekomunikasi 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 Dayamitra Telekomunikasi will offset losses from the drop in Dayamitra Telekomunikasi's long position.| Alfa Energi vs. Borneo Olah Sarana | Alfa Energi vs. Kapuas Prima Coal | Alfa Energi vs. Central Omega Resources | Alfa Energi vs. Buana Listya Tama |
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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 Share Portfolio module to track or share privately all of your investments from the convenience of any device.
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