Correlation Between PT Dewi and PT Data

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Can any of the company-specific risk be diversified away by investing in both PT Dewi and PT Data 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 PT Dewi and PT Data into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between PT Dewi Shri and PT Data Sinergitama, you can compare the effects of market volatilities on PT Dewi and PT Data 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 PT Dewi with a short position of PT Data. Check out your portfolio center. Please also check ongoing floating volatility patterns of PT Dewi and PT Data.

Diversification Opportunities for PT Dewi and PT Data

0.46
  Correlation Coefficient

Very weak diversification

The 3 months correlation between DEWI and ELIT is 0.46. Overlapping area represents the amount of risk that can be diversified away by holding PT Dewi Shri and PT Data Sinergitama in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on PT Data Sinergitama and PT Dewi 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 PT Dewi Shri are associated (or correlated) with PT Data. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of PT Data Sinergitama has no effect on the direction of PT Dewi i.e., PT Dewi and PT Data go up and down completely randomly.

Pair Corralation between PT Dewi and PT Data

Assuming the 90 days trading horizon PT Dewi Shri is expected to under-perform the PT Data. But the stock apears to be less risky and, when comparing its historical volatility, PT Dewi Shri is 1.03 times less risky than PT Data. The stock trades about -0.02 of its potential returns per unit of risk. The PT Data Sinergitama is currently generating about 0.03 of returns per unit of risk over similar time horizon. If you would invest  10,493  in PT Data Sinergitama on September 6, 2024 and sell it today you would earn a total of  1,207  from holding PT Data Sinergitama or generate 11.5% return on investment over 90 days.
Time Period3 Months [change]
DirectionMoves Together 
StrengthWeak
Accuracy96.83%
ValuesDaily Returns

PT Dewi Shri  vs.  PT Data Sinergitama

 Performance 
       Timeline  
PT Dewi Shri 

Risk-Adjusted Performance

10 of 100

 
Weak
 
Strong
OK
Compared to the overall equity markets, risk-adjusted returns on investments in PT Dewi Shri are ranked lower than 10 (%) of all global equities and portfolios over the last 90 days. Despite quite conflicting forward-looking signals, PT Dewi disclosed solid returns over the last few months and may actually be approaching a breakup point.
PT Data Sinergitama 

Risk-Adjusted Performance

4 of 100

 
Weak
 
Strong
Insignificant
Compared to the overall equity markets, risk-adjusted returns on investments in PT Data Sinergitama are ranked lower than 4 (%) of all global equities and portfolios over the last 90 days. Despite quite conflicting forward-looking signals, PT Data may actually be approaching a critical reversion point that can send shares even higher in January 2025.

PT Dewi and PT Data Volatility Contrast

   Predicted Return Density   
       Returns  

Pair Trading with PT Dewi and PT Data

The main advantage of trading using opposite PT Dewi and PT Data positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if PT Dewi position performs unexpectedly, PT Data 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 PT Data will offset losses from the drop in PT Data's long position.
The idea behind PT Dewi Shri and PT Data Sinergitama 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 Insider Screener module to find insiders across different sectors to evaluate their impact on performance.

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