Correlation Between Gunawan Dianjaya and Darma Henwa
Can any of the company-specific risk be diversified away by investing in both Gunawan Dianjaya and Darma Henwa 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 Gunawan Dianjaya and Darma Henwa into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Gunawan Dianjaya Steel and Darma Henwa Tbk, you can compare the effects of market volatilities on Gunawan Dianjaya and Darma Henwa 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 Gunawan Dianjaya with a short position of Darma Henwa. Check out your portfolio center. Please also check ongoing floating volatility patterns of Gunawan Dianjaya and Darma Henwa.
Diversification Opportunities for Gunawan Dianjaya and Darma Henwa
-0.71 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Gunawan and Darma is -0.71. Overlapping area represents the amount of risk that can be diversified away by holding Gunawan Dianjaya Steel and Darma Henwa Tbk in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Darma Henwa Tbk and Gunawan Dianjaya 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 Gunawan Dianjaya Steel are associated (or correlated) with Darma Henwa. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Darma Henwa Tbk has no effect on the direction of Gunawan Dianjaya i.e., Gunawan Dianjaya and Darma Henwa go up and down completely randomly.
Pair Corralation between Gunawan Dianjaya and Darma Henwa
Assuming the 90 days trading horizon Gunawan Dianjaya Steel is expected to under-perform the Darma Henwa. But the stock apears to be less risky and, when comparing its historical volatility, Gunawan Dianjaya Steel is 1.19 times less risky than Darma Henwa. The stock trades about -0.02 of its potential returns per unit of risk. The Darma Henwa Tbk is currently generating about 0.11 of returns per unit of risk over similar time horizon. If you would invest 5,900 in Darma Henwa Tbk on August 28, 2024 and sell it today you would earn a total of 5,800 from holding Darma Henwa Tbk or generate 98.31% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 99.49% |
| Values | Daily Returns |
Gunawan Dianjaya Steel vs. Darma Henwa Tbk
Performance |
| Timeline |
| Gunawan Dianjaya Steel |
| Darma Henwa Tbk |
Gunawan Dianjaya and Darma Henwa Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Gunawan Dianjaya and Darma Henwa
The main advantage of trading using opposite Gunawan Dianjaya and Darma Henwa positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Gunawan Dianjaya position performs unexpectedly, Darma Henwa 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 Darma Henwa will offset losses from the drop in Darma Henwa's long position.| Gunawan Dianjaya vs. Lotte Chemical Titan | Gunawan Dianjaya vs. Indopoly Swakarsa Industry | Gunawan Dianjaya vs. Saranacentral Bajatama Tbk | Gunawan Dianjaya vs. Pelat Timah Nusantara |
| Darma Henwa vs. Bakrieland Development Tbk | Darma Henwa vs. Energi Mega Persada | Darma Henwa vs. Bakrie Brothers Tbk | Darma Henwa vs. Bakrie Sumatera Plantations |
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 Portfolio File Import module to quickly import all of your third-party portfolios from your local drive in csv format.
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