Correlation Between Perdana Karya and Delta Dunia
Can any of the company-specific risk be diversified away by investing in both Perdana Karya and Delta Dunia 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 Perdana Karya and Delta Dunia into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Perdana Karya Perkasa and Delta Dunia Makmur, you can compare the effects of market volatilities on Perdana Karya and Delta Dunia 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 Perdana Karya with a short position of Delta Dunia. Check out your portfolio center. Please also check ongoing floating volatility patterns of Perdana Karya and Delta Dunia.
Diversification Opportunities for Perdana Karya and Delta Dunia
-0.2 | Correlation Coefficient |
Good diversification
The 3 months correlation between Perdana and Delta is -0.2. Overlapping area represents the amount of risk that can be diversified away by holding Perdana Karya Perkasa and Delta Dunia Makmur in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Delta Dunia Makmur and Perdana Karya 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 Perdana Karya Perkasa are associated (or correlated) with Delta Dunia. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Delta Dunia Makmur has no effect on the direction of Perdana Karya i.e., Perdana Karya and Delta Dunia go up and down completely randomly.
Pair Corralation between Perdana Karya and Delta Dunia
Assuming the 90 days trading horizon Perdana Karya Perkasa is expected to generate 2.5 times more return on investment than Delta Dunia. However, Perdana Karya is 2.5 times more volatile than Delta Dunia Makmur. It trades about 0.21 of its potential returns per unit of risk. Delta Dunia Makmur is currently generating about 0.01 per unit of risk. If you would invest 35,600 in Perdana Karya Perkasa on August 28, 2024 and sell it today you would earn a total of 45,400 from holding Perdana Karya Perkasa or generate 127.53% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Perdana Karya Perkasa vs. Delta Dunia Makmur
Performance |
| Timeline |
| Perdana Karya Perkasa |
| Delta Dunia Makmur |
Perdana Karya and Delta Dunia Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Perdana Karya and Delta Dunia
The main advantage of trading using opposite Perdana Karya and Delta Dunia positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Perdana Karya position performs unexpectedly, Delta Dunia 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 Delta Dunia will offset losses from the drop in Delta Dunia's long position.The idea behind Perdana Karya Perkasa and Delta Dunia Makmur pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.| Delta Dunia vs. Indika Energy Tbk | Delta Dunia vs. Elnusa Tbk | Delta Dunia vs. Harum Energy Tbk | Delta Dunia vs. Energi Mega Persada |
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 Idea Optimizer module to use advanced portfolio builder with pre-computed micro ideas to build optimal portfolio .
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