Correlation Between Archi Indonesia and Dayamitra Telekomunikasi

Can any of the company-specific risk be diversified away by investing in both Archi Indonesia and Dayamitra Telekomunikasi 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 Archi Indonesia and Dayamitra Telekomunikasi into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Archi Indonesia Tbk and Dayamitra Telekomunikasi PT, you can compare the effects of market volatilities on Archi Indonesia and Dayamitra Telekomunikasi 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 Archi Indonesia with a short position of Dayamitra Telekomunikasi. Check out your portfolio center. Please also check ongoing floating volatility patterns of Archi Indonesia and Dayamitra Telekomunikasi.

Diversification Opportunities for Archi Indonesia and Dayamitra Telekomunikasi

0.12

Correlation Coefficient

Archi Indonesia  Dayamitra Telekomunikasi

Average diversification

The 3 months correlation between Archi and Dayamitra is 0.12. Overlapping area represents the amount of risk that can be diversified away by holding Archi Indonesia Tbk and Dayamitra Telekomunikasi PT in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Dayamitra Telekomunikasi and Archi Indonesia 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 Archi Indonesia Tbk are associated (or correlated) with Dayamitra Telekomunikasi. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Dayamitra Telekomunikasi has no effect on the direction of Archi Indonesia i.e., Archi Indonesia and Dayamitra Telekomunikasi go up and down completely randomly.

Pair Corralation between Archi Indonesia and Dayamitra Telekomunikasi

Assuming the 90 days trading horizon Archi Indonesia Tbk is expected to under-perform the Dayamitra Telekomunikasi. In addition to that, Archi Indonesia is 1.56 times more volatile than Dayamitra Telekomunikasi PT. It trades about -0.01 of its total potential returns per unit of risk. Dayamitra Telekomunikasi PT is currently generating about -0.01 per unit of volatility. If you would invest  75,166  in Dayamitra Telekomunikasi PT on September 19, 2024 and sell it today you would lose (7,666) from holding Dayamitra Telekomunikasi PT or give up 10.2% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Insignificant
Accuracy	99.79%
Values	Daily Returns

Archi Indonesia Tbk  vs.  Dayamitra Telekomunikasi PT

Archi Indonesia Tbk

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Archi Indonesia Tbk has generated negative risk-adjusted returns adding no value to investors with long positions. Despite latest conflicting performance, the Stock's forward-looking signals remain persistent and the latest mess on Wall Street may also be a sign of long-standing gains for the company institutional investors.

Dayamitra Telekomunikasi

Risk-Adjusted Performance

2 of 100

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Dayamitra Telekomunikasi PT are ranked lower than 2 (%) of all global equities and portfolios over the last 90 days. Despite quite persistent forward-looking signals, Dayamitra Telekomunikasi is not utilizing all of its potentials. The latest stock price mess, may contribute to short-term losses for the institutional investors.

Pair Trading with Archi Indonesia and Dayamitra Telekomunikasi

The main advantage of trading using opposite Archi Indonesia and Dayamitra Telekomunikasi positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Archi Indonesia position performs unexpectedly, Dayamitra Telekomunikasi 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 Dayamitra Telekomunikasi will offset losses from the drop in Dayamitra Telekomunikasi's long position.

The idea behind Archi Indonesia Tbk and Dayamitra Telekomunikasi PT pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.

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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 Anywhere module to track or share privately all of your investments from the convenience of any device.