Correlation Between Perusahaan Gas and Darma Henwa
Can any of the company-specific risk be diversified away by investing in both Perusahaan Gas 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 Perusahaan Gas and Darma Henwa into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Perusahaan Gas Negara and Darma Henwa Tbk, you can compare the effects of market volatilities on Perusahaan Gas 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 Perusahaan Gas with a short position of Darma Henwa. Check out your portfolio center. Please also check ongoing floating volatility patterns of Perusahaan Gas and Darma Henwa.
Diversification Opportunities for Perusahaan Gas and Darma Henwa
0.14 | Correlation Coefficient |
Average diversification
The 3 months correlation between Perusahaan and Darma is 0.14. Overlapping area represents the amount of risk that can be diversified away by holding Perusahaan Gas Negara 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 Perusahaan Gas 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 Perusahaan Gas Negara 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 Perusahaan Gas i.e., Perusahaan Gas and Darma Henwa go up and down completely randomly.
Pair Corralation between Perusahaan Gas and Darma Henwa
Assuming the 90 days trading horizon Perusahaan Gas is expected to generate 10.32 times less return on investment than Darma Henwa. But when comparing it to its historical volatility, Perusahaan Gas Negara is 2.02 times less risky than Darma Henwa. It trades about 0.01 of its potential returns per unit of risk. Darma Henwa Tbk is currently generating about 0.06 of returns per unit of risk over similar time horizon. If you would invest 5,400 in Darma Henwa Tbk on September 2, 2024 and sell it today you would earn a total of 5,200 from holding Darma Henwa Tbk or generate 96.3% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 99.79% |
| Values | Daily Returns |
Perusahaan Gas Negara vs. Darma Henwa Tbk
Performance |
| Timeline |
| Perusahaan Gas Negara |
| Darma Henwa Tbk |
Perusahaan Gas and Darma Henwa Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Perusahaan Gas and Darma Henwa
The main advantage of trading using opposite Perusahaan Gas and Darma Henwa positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Perusahaan Gas 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.| Perusahaan Gas vs. Aneka Tambang Persero | Perusahaan Gas vs. Bukit Asam Tbk | Perusahaan Gas vs. Telkom Indonesia Tbk | Perusahaan Gas vs. Astra International Tbk |
| 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 Comparator module to compare the composition, asset allocations and performance of any two portfolios in your account.
Other Complementary Tools
| Companies Directory Evaluate performance of over 100,000 Stocks, Funds, and ETFs against different fundamentals | |
| Financial Widgets Easily integrated Macroaxis content with over 30 different plug-and-play financial widgets | |
| Content Syndication Quickly integrate customizable finance content to your own investment portal | |
| Sectors List of equity sectors categorizing publicly traded companies based on their primary business activities | |
| Commodity Directory Find actively traded commodities issued by global exchanges |