Correlation Between Indo Acidatama and Dharma Polimetal
Can any of the company-specific risk be diversified away by investing in both Indo Acidatama and Dharma Polimetal 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 Indo Acidatama and Dharma Polimetal into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Indo Acidatama Tbk and Dharma Polimetal Tbk, you can compare the effects of market volatilities on Indo Acidatama and Dharma Polimetal 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 Indo Acidatama with a short position of Dharma Polimetal. Check out your portfolio center. Please also check ongoing floating volatility patterns of Indo Acidatama and Dharma Polimetal.
Diversification Opportunities for Indo Acidatama and Dharma Polimetal
0.24 | Correlation Coefficient |
Modest diversification
The 3 months correlation between Indo and Dharma is 0.24. Overlapping area represents the amount of risk that can be diversified away by holding Indo Acidatama Tbk and Dharma Polimetal Tbk in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Dharma Polimetal Tbk and Indo Acidatama 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 Indo Acidatama Tbk are associated (or correlated) with Dharma Polimetal. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Dharma Polimetal Tbk has no effect on the direction of Indo Acidatama i.e., Indo Acidatama and Dharma Polimetal go up and down completely randomly.
Pair Corralation between Indo Acidatama and Dharma Polimetal
Assuming the 90 days trading horizon Indo Acidatama is expected to generate 1.33 times less return on investment than Dharma Polimetal. But when comparing it to its historical volatility, Indo Acidatama Tbk is 1.47 times less risky than Dharma Polimetal. It trades about 0.02 of its potential returns per unit of risk. Dharma Polimetal Tbk is currently generating about 0.01 of returns per unit of risk over similar time horizon. If you would invest 89,000 in Dharma Polimetal Tbk on November 28, 2024 and sell it today you would earn a total of 1,500 from holding Dharma Polimetal Tbk or generate 1.69% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Indo Acidatama Tbk vs. Dharma Polimetal Tbk
Performance |
| Timeline |
| Indo Acidatama Tbk |
| Dharma Polimetal Tbk |
Indo Acidatama and Dharma Polimetal Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Indo Acidatama and Dharma Polimetal
The main advantage of trading using opposite Indo Acidatama and Dharma Polimetal positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Indo Acidatama position performs unexpectedly, Dharma Polimetal 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 Dharma Polimetal will offset losses from the drop in Dharma Polimetal's long position.| Indo Acidatama vs. PT Sreeya Sewu | Indo Acidatama vs. Trias Sentosa Tbk | Indo Acidatama vs. Slj Global Tbk | Indo Acidatama vs. Suparma Tbk |
| Dharma Polimetal vs. Triputra Agro Persada | Dharma Polimetal vs. Autopedia Sukses Lestari | Dharma Polimetal vs. Cisarua Mountain Dairy | Dharma Polimetal vs. Surya Esa Perkasa |
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 Economic Indicators module to top statistical indicators that provide insights into how an economy is performing.
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