Correlation Between Dana Brata and Putra Rajawali
Can any of the company-specific risk be diversified away by investing in both Dana Brata and Putra Rajawali 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 Dana Brata and Putra Rajawali into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Dana Brata Luhur and Putra Rajawali Kencana, you can compare the effects of market volatilities on Dana Brata and Putra Rajawali 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 Dana Brata with a short position of Putra Rajawali. Check out your portfolio center. Please also check ongoing floating volatility patterns of Dana Brata and Putra Rajawali.
Diversification Opportunities for Dana Brata and Putra Rajawali
0.69 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Dana and Putra is 0.69. Overlapping area represents the amount of risk that can be diversified away by holding Dana Brata Luhur and Putra Rajawali Kencana in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Putra Rajawali Kencana and Dana Brata 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 Dana Brata Luhur are associated (or correlated) with Putra Rajawali. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Putra Rajawali Kencana has no effect on the direction of Dana Brata i.e., Dana Brata and Putra Rajawali go up and down completely randomly.
Pair Corralation between Dana Brata and Putra Rajawali
Assuming the 90 days trading horizon Dana Brata Luhur is expected to generate 0.2 times more return on investment than Putra Rajawali. However, Dana Brata Luhur is 5.06 times less risky than Putra Rajawali. It trades about -0.07 of its potential returns per unit of risk. Putra Rajawali Kencana is currently generating about -0.14 per unit of risk. If you would invest 64,970 in Dana Brata Luhur on August 31, 2024 and sell it today you would lose (1,970) from holding Dana Brata Luhur or give up 3.03% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 97.73% |
| Values | Daily Returns |
Dana Brata Luhur vs. Putra Rajawali Kencana
Performance |
| Timeline |
| Dana Brata Luhur |
| Putra Rajawali Kencana |
Dana Brata and Putra Rajawali Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Dana Brata and Putra Rajawali
The main advantage of trading using opposite Dana Brata and Putra Rajawali positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Dana Brata position performs unexpectedly, Putra Rajawali 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 Putra Rajawali will offset losses from the drop in Putra Rajawali's long position.| Dana Brata vs. Pelita Samudera Shipping | Dana Brata vs. Trans Power Marine | Dana Brata vs. Kencana Energi Lestari | Dana Brata vs. Pelayaran Nelly Dwi |
| Putra Rajawali vs. Kapuas Prima Coal | Putra Rajawali vs. Karya Bersama Anugerah | Putra Rajawali vs. Era Mandiri Cemerlang | Putra Rajawali vs. PP Presisi Tbk |
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 Suggestion module to get suggestions outside of your existing asset allocation including your own model portfolios.
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