Correlation Between Duta Anggada and Intiland Development

Can any of the company-specific risk be diversified away by investing in both Duta Anggada and Intiland Development 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 Duta Anggada and Intiland Development into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Duta Anggada Realty and Intiland Development Tbk, you can compare the effects of market volatilities on Duta Anggada and Intiland Development 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 Duta Anggada with a short position of Intiland Development. Check out your portfolio center. Please also check ongoing floating volatility patterns of Duta Anggada and Intiland Development.

Diversification Opportunities for Duta Anggada and Intiland Development

0.29

Correlation Coefficient

Duta Anggada  Intiland Development

Modest diversification

The 3 months correlation between Duta and Intiland is 0.29. Overlapping area represents the amount of risk that can be diversified away by holding Duta Anggada Realty and Intiland Development Tbk in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Intiland Development Tbk and Duta Anggada 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 Duta Anggada Realty are associated (or correlated) with Intiland Development. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Intiland Development Tbk has no effect on the direction of Duta Anggada i.e., Duta Anggada and Intiland Development go up and down completely randomly.

Pair Corralation between Duta Anggada and Intiland Development

Assuming the 90 days trading horizon Duta Anggada Realty is expected to generate 6.9 times more return on investment than Intiland Development. However, Duta Anggada is 6.9 times more volatile than Intiland Development Tbk. It trades about 0.08 of its potential returns per unit of risk. Intiland Development Tbk is currently generating about -0.1 per unit of risk. If you would invest  16,800  in Duta Anggada Realty on September 14, 2024 and sell it today you would earn a total of  1,400  from holding Duta Anggada Realty or generate 8.33% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Very Weak
Accuracy	100.0%
Values	Daily Returns

Duta Anggada Realty  vs.  Intiland Development Tbk

Duta Anggada Realty

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Duta Anggada Realty has generated negative risk-adjusted returns adding no value to investors with long positions. Despite quite persistent forward-looking signals, Duta Anggada is not utilizing all of its potentials. The latest stock price mess, may contribute to short-term losses for the institutional investors.

Intiland Development Tbk

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Intiland Development Tbk has generated negative risk-adjusted returns adding no value to investors with long positions. Despite conflicting performance in the last few months, the Stock's forward-looking signals remain quite persistent which may send shares a bit higher in January 2025. The latest mess may also be a sign of long-standing up-swing for the company institutional investors.

Pair Trading with Duta Anggada and Intiland Development

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

The idea behind Duta Anggada Realty and Intiland Development Tbk 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 Fundamentals Comparison module to compare fundamentals across multiple equities to find investing opportunities.