Correlation Between Widodo Makmur and Dharma Satya
Can any of the company-specific risk be diversified away by investing in both Widodo Makmur and Dharma Satya 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 Widodo Makmur and Dharma Satya into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Widodo Makmur Unggas and Dharma Satya Nusantara, you can compare the effects of market volatilities on Widodo Makmur and Dharma Satya 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 Widodo Makmur with a short position of Dharma Satya. Check out your portfolio center. Please also check ongoing floating volatility patterns of Widodo Makmur and Dharma Satya.
Diversification Opportunities for Widodo Makmur and Dharma Satya
-0.33 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Widodo and Dharma is -0.33. Overlapping area represents the amount of risk that can be diversified away by holding Widodo Makmur Unggas and Dharma Satya Nusantara in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Dharma Satya Nusantara and Widodo Makmur 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 Widodo Makmur Unggas are associated (or correlated) with Dharma Satya. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Dharma Satya Nusantara has no effect on the direction of Widodo Makmur i.e., Widodo Makmur and Dharma Satya go up and down completely randomly.
Pair Corralation between Widodo Makmur and Dharma Satya
Assuming the 90 days trading horizon Widodo Makmur is expected to generate 1.51 times less return on investment than Dharma Satya. In addition to that, Widodo Makmur is 1.22 times more volatile than Dharma Satya Nusantara. It trades about 0.03 of its total potential returns per unit of risk. Dharma Satya Nusantara is currently generating about 0.05 per unit of volatility. If you would invest 110,000 in Dharma Satya Nusantara on September 1, 2024 and sell it today you would earn a total of 3,500 from holding Dharma Satya Nusantara or generate 3.18% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 95.45% |
| Values | Daily Returns |
Widodo Makmur Unggas vs. Dharma Satya Nusantara
Performance |
| Timeline |
| Widodo Makmur Unggas |
| Dharma Satya Nusantara |
Widodo Makmur and Dharma Satya Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Widodo Makmur and Dharma Satya
The main advantage of trading using opposite Widodo Makmur and Dharma Satya positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Widodo Makmur position performs unexpectedly, Dharma Satya 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 Satya will offset losses from the drop in Dharma Satya's long position.| Widodo Makmur vs. Triputra Agro Persada | Widodo Makmur vs. Aneka Gas Industri | Widodo Makmur vs. Saratoga Investama Sedaya | Widodo Makmur vs. Puradelta Lestari PT |
| Dharma Satya vs. Bank BRISyariah Tbk | Dharma Satya vs. Mitra Pinasthika Mustika | Dharma Satya vs. Jakarta Int Hotels | Dharma Satya vs. Indosterling Technomedia 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 Bond Analysis module to evaluate and analyze corporate bonds as a potential investment for your portfolios..
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