Correlation Between Perusahaan Gas and DMS Propertindo
Can any of the company-specific risk be diversified away by investing in both Perusahaan Gas and DMS Propertindo 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 DMS Propertindo 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 DMS Propertindo Tbk, you can compare the effects of market volatilities on Perusahaan Gas and DMS Propertindo 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 DMS Propertindo. Check out your portfolio center. Please also check ongoing floating volatility patterns of Perusahaan Gas and DMS Propertindo.
Diversification Opportunities for Perusahaan Gas and DMS Propertindo
-0.52 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Perusahaan and DMS is -0.52. Overlapping area represents the amount of risk that can be diversified away by holding Perusahaan Gas Negara and DMS Propertindo Tbk in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on DMS Propertindo 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 DMS Propertindo. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of DMS Propertindo Tbk has no effect on the direction of Perusahaan Gas i.e., Perusahaan Gas and DMS Propertindo go up and down completely randomly.
Pair Corralation between Perusahaan Gas and DMS Propertindo
Assuming the 90 days trading horizon Perusahaan Gas Negara is expected to generate 0.22 times more return on investment than DMS Propertindo. However, Perusahaan Gas Negara is 4.49 times less risky than DMS Propertindo. It trades about 0.08 of its potential returns per unit of risk. DMS Propertindo Tbk is currently generating about -0.05 per unit of risk. If you would invest 156,000 in Perusahaan Gas Negara on October 23, 2024 and sell it today you would earn a total of 5,000 from holding Perusahaan Gas Negara or generate 3.21% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 94.44% |
| Values | Daily Returns |
Perusahaan Gas Negara vs. DMS Propertindo Tbk
Performance |
| Timeline |
| Perusahaan Gas Negara |
| DMS Propertindo Tbk |
Perusahaan Gas and DMS Propertindo Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Perusahaan Gas and DMS Propertindo
The main advantage of trading using opposite Perusahaan Gas and DMS Propertindo positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Perusahaan Gas position performs unexpectedly, DMS Propertindo 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 DMS Propertindo will offset losses from the drop in DMS Propertindo's long position.| Perusahaan Gas vs. Kapuas Prima Coal | Perusahaan Gas vs. Cikarang Listrindo Tbk | Perusahaan Gas vs. PP Presisi Tbk | Perusahaan Gas vs. Alfa Energi Investama |
| DMS Propertindo vs. Bima Sakti Pertiwi | DMS Propertindo vs. Karya Bersama Anugerah | DMS Propertindo vs. Pollux Properti Indonesia | DMS Propertindo vs. Surya Permata Andalan |
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 Odds Of Bankruptcy module to get analysis of equity chance of financial distress in the next 2 years.
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