Correlation Between Pratama Widya and Diamond Citra
Can any of the company-specific risk be diversified away by investing in both Pratama Widya and Diamond Citra 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 Pratama Widya and Diamond Citra into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Pratama Widya Tbk and Diamond Citra Propertindo, you can compare the effects of market volatilities on Pratama Widya and Diamond Citra 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 Pratama Widya with a short position of Diamond Citra. Check out your portfolio center. Please also check ongoing floating volatility patterns of Pratama Widya and Diamond Citra.
Diversification Opportunities for Pratama Widya and Diamond Citra
0.07 | Correlation Coefficient |
Significant diversification
The 3 months correlation between Pratama and Diamond is 0.07. Overlapping area represents the amount of risk that can be diversified away by holding Pratama Widya Tbk and Diamond Citra Propertindo in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Diamond Citra Propertindo and Pratama Widya 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 Pratama Widya Tbk are associated (or correlated) with Diamond Citra. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Diamond Citra Propertindo has no effect on the direction of Pratama Widya i.e., Pratama Widya and Diamond Citra go up and down completely randomly.
Pair Corralation between Pratama Widya and Diamond Citra
Assuming the 90 days trading horizon Pratama Widya Tbk is expected to generate 0.08 times more return on investment than Diamond Citra. However, Pratama Widya Tbk is 13.19 times less risky than Diamond Citra. It trades about -0.19 of its potential returns per unit of risk. Diamond Citra Propertindo is currently generating about -0.03 per unit of risk. If you would invest 95,000 in Pratama Widya Tbk on September 4, 2024 and sell it today you would lose (2,500) from holding Pratama Widya Tbk or give up 2.63% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Pratama Widya Tbk vs. Diamond Citra Propertindo
Performance |
| Timeline |
| Pratama Widya Tbk |
| Diamond Citra Propertindo |
Pratama Widya and Diamond Citra Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Pratama Widya and Diamond Citra
The main advantage of trading using opposite Pratama Widya and Diamond Citra positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Pratama Widya position performs unexpectedly, Diamond Citra 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 Citra will offset losses from the drop in Diamond Citra's long position.| Pratama Widya vs. Kencana Energi Lestari | Pratama Widya vs. Pelita Samudera Shipping | Pratama Widya vs. Paramita Bangun Sarana | Pratama Widya vs. Dana Brata Luhur |
| Diamond Citra vs. Bima Sakti Pertiwi | Diamond Citra vs. Karya Bersama Anugerah | Diamond Citra vs. Pollux Properti Indonesia | Diamond Citra 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 My Watchlist Analysis module to analyze my current watchlist and to refresh optimization strategy. Macroaxis watchlist is based on self-learning algorithm to remember stocks you like.
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