Correlation Between Dayamitra Telekomunikasi and Wahana Inti
Can any of the company-specific risk be diversified away by investing in both Dayamitra Telekomunikasi and Wahana Inti 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 Dayamitra Telekomunikasi and Wahana Inti into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Dayamitra Telekomunikasi PT and Wahana Inti MakmurTbk, you can compare the effects of market volatilities on Dayamitra Telekomunikasi and Wahana Inti 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 Dayamitra Telekomunikasi with a short position of Wahana Inti. Check out your portfolio center. Please also check ongoing floating volatility patterns of Dayamitra Telekomunikasi and Wahana Inti.
Diversification Opportunities for Dayamitra Telekomunikasi and Wahana Inti
0.69 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Dayamitra and Wahana is 0.69. Overlapping area represents the amount of risk that can be diversified away by holding Dayamitra Telekomunikasi PT and Wahana Inti MakmurTbk in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Wahana Inti MakmurTbk and Dayamitra Telekomunikasi 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 Dayamitra Telekomunikasi PT are associated (or correlated) with Wahana Inti. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Wahana Inti MakmurTbk has no effect on the direction of Dayamitra Telekomunikasi i.e., Dayamitra Telekomunikasi and Wahana Inti go up and down completely randomly.
Pair Corralation between Dayamitra Telekomunikasi and Wahana Inti
Assuming the 90 days trading horizon Dayamitra Telekomunikasi is expected to generate 100.1 times less return on investment than Wahana Inti. But when comparing it to its historical volatility, Dayamitra Telekomunikasi PT is 3.21 times less risky than Wahana Inti. It trades about 0.0 of its potential returns per unit of risk. Wahana Inti MakmurTbk is currently generating about 0.04 of returns per unit of risk over similar time horizon. If you would invest 7,200 in Wahana Inti MakmurTbk on September 2, 2024 and sell it today you would earn a total of 1,400 from holding Wahana Inti MakmurTbk or generate 19.44% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Dayamitra Telekomunikasi PT vs. Wahana Inti MakmurTbk
Performance |
| Timeline |
| Dayamitra Telekomunikasi |
| Wahana Inti MakmurTbk |
Dayamitra Telekomunikasi and Wahana Inti Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Dayamitra Telekomunikasi and Wahana Inti
The main advantage of trading using opposite Dayamitra Telekomunikasi and Wahana Inti positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Dayamitra Telekomunikasi position performs unexpectedly, Wahana Inti 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 Wahana Inti will offset losses from the drop in Wahana Inti's long position.| Dayamitra Telekomunikasi vs. PT Bukalapak | Dayamitra Telekomunikasi vs. PT Sarana Menara | Dayamitra Telekomunikasi vs. GoTo Gojek Tokopedia | Dayamitra Telekomunikasi vs. Elang Mahkota Teknologi |
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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 Options Analysis module to analyze and evaluate options and option chains as a potential hedge for your portfolios.
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