Correlation Between Integra Indocabinet and Darma Henwa
Can any of the company-specific risk be diversified away by investing in both Integra Indocabinet and Darma Henwa 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 Integra Indocabinet and Darma Henwa into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Integra Indocabinet Tbk and Darma Henwa Tbk, you can compare the effects of market volatilities on Integra Indocabinet and Darma Henwa 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 Integra Indocabinet with a short position of Darma Henwa. Check out your portfolio center. Please also check ongoing floating volatility patterns of Integra Indocabinet and Darma Henwa.
Diversification Opportunities for Integra Indocabinet and Darma Henwa
0.8 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Integra and Darma is 0.8. Overlapping area represents the amount of risk that can be diversified away by holding Integra Indocabinet Tbk and Darma Henwa Tbk in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Darma Henwa Tbk and Integra Indocabinet 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 Integra Indocabinet Tbk are associated (or correlated) with Darma Henwa. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Darma Henwa Tbk has no effect on the direction of Integra Indocabinet i.e., Integra Indocabinet and Darma Henwa go up and down completely randomly.
Pair Corralation between Integra Indocabinet and Darma Henwa
Assuming the 90 days trading horizon Integra Indocabinet is expected to generate 5.33 times less return on investment than Darma Henwa. But when comparing it to its historical volatility, Integra Indocabinet Tbk is 1.46 times less risky than Darma Henwa. It trades about 0.03 of its potential returns per unit of risk. Darma Henwa Tbk is currently generating about 0.12 of returns per unit of risk over similar time horizon. If you would invest 9,300 in Darma Henwa Tbk on September 1, 2024 and sell it today you would earn a total of 1,300 from holding Darma Henwa Tbk or generate 13.98% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Integra Indocabinet Tbk vs. Darma Henwa Tbk
Performance |
| Timeline |
| Integra Indocabinet Tbk |
| Darma Henwa Tbk |
Integra Indocabinet and Darma Henwa Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Integra Indocabinet and Darma Henwa
The main advantage of trading using opposite Integra Indocabinet and Darma Henwa positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Integra Indocabinet position performs unexpectedly, Darma Henwa 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 Darma Henwa will offset losses from the drop in Darma Henwa's long position.| Integra Indocabinet vs. Buyung Poetra Sembada | Integra Indocabinet vs. Erajaya Swasembada Tbk | Integra Indocabinet vs. Sariguna Primatirta PT | Integra Indocabinet vs. Puradelta Lestari PT |
| Darma Henwa vs. Bakrieland Development Tbk | Darma Henwa vs. Energi Mega Persada | Darma Henwa vs. Bakrie Brothers Tbk | Darma Henwa vs. Bakrie Sumatera Plantations |
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 ETF Categories module to list of ETF categories grouped based on various criteria, such as the investment strategy or type of investments.
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