Correlation Between Humpuss Intermoda and Diamond Food
Can any of the company-specific risk be diversified away by investing in both Humpuss Intermoda 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 Humpuss Intermoda and Diamond Food into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Humpuss Intermoda Transportasi and Diamond Food Indonesia, you can compare the effects of market volatilities on Humpuss Intermoda 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 Humpuss Intermoda with a short position of Diamond Food. Check out your portfolio center. Please also check ongoing floating volatility patterns of Humpuss Intermoda and Diamond Food.
Diversification Opportunities for Humpuss Intermoda and Diamond Food
-0.3 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Humpuss and Diamond is -0.3. Overlapping area represents the amount of risk that can be diversified away by holding Humpuss Intermoda Transportasi 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 Humpuss Intermoda 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 Humpuss Intermoda Transportasi 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 Humpuss Intermoda i.e., Humpuss Intermoda and Diamond Food go up and down completely randomly.
Pair Corralation between Humpuss Intermoda and Diamond Food
Assuming the 90 days trading horizon Humpuss Intermoda Transportasi is expected to generate 2.36 times more return on investment than Diamond Food. However, Humpuss Intermoda is 2.36 times more volatile than Diamond Food Indonesia. It trades about 0.1 of its potential returns per unit of risk. Diamond Food Indonesia is currently generating about -0.08 per unit of risk. If you would invest 40,600 in Humpuss Intermoda Transportasi on September 3, 2024 and sell it today you would earn a total of 2,000 from holding Humpuss Intermoda Transportasi or generate 4.93% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Humpuss Intermoda Transportasi vs. Diamond Food Indonesia
Performance |
| Timeline |
| Humpuss Intermoda |
| Diamond Food Indonesia |
Humpuss Intermoda and Diamond Food Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Humpuss Intermoda and Diamond Food
The main advantage of trading using opposite Humpuss Intermoda and Diamond Food positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Humpuss Intermoda 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.| Humpuss Intermoda vs. Weha Transportasi Indonesia | Humpuss Intermoda vs. Mitra Pinasthika Mustika | Humpuss Intermoda vs. Jakarta Int Hotels | Humpuss Intermoda vs. Asuransi Harta Aman |
| Diamond Food vs. Garudafood Putra Putri | Diamond Food vs. PT Wahana Interfood | Diamond Food vs. Mitra Pinasthika Mustika | Diamond Food vs. Jakarta Int Hotels |
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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