Correlation Between Dian Swastatika and Inti Bangun

Can any of the company-specific risk be diversified away by investing in both Dian Swastatika and Inti Bangun 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 Dian Swastatika and Inti Bangun into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Dian Swastatika Sentosa and Inti Bangun Sejahtera, you can compare the effects of market volatilities on Dian Swastatika and Inti Bangun 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 Dian Swastatika with a short position of Inti Bangun. Check out your portfolio center. Please also check ongoing floating volatility patterns of Dian Swastatika and Inti Bangun.

Diversification Opportunities for Dian Swastatika and Inti Bangun

-0.09

Correlation Coefficient

Dian Swastatika  Inti Bangun

Good diversification

The 3 months correlation between Dian and Inti is -0.09. Overlapping area represents the amount of risk that can be diversified away by holding Dian Swastatika Sentosa and Inti Bangun Sejahtera in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Inti Bangun Sejahtera and Dian Swastatika 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 Dian Swastatika Sentosa are associated (or correlated) with Inti Bangun. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Inti Bangun Sejahtera has no effect on the direction of Dian Swastatika i.e., Dian Swastatika and Inti Bangun go up and down completely randomly.

Pair Corralation between Dian Swastatika and Inti Bangun

Assuming the 90 days trading horizon Dian Swastatika Sentosa is expected to generate 0.85 times more return on investment than Inti Bangun. However, Dian Swastatika Sentosa is 1.17 times less risky than Inti Bangun. It trades about 0.01 of its potential returns per unit of risk. Inti Bangun Sejahtera is currently generating about -0.04 per unit of risk. If you would invest  4,112,500  in Dian Swastatika Sentosa on September 16, 2024 and sell it today you would lose (2,500) from holding Dian Swastatika Sentosa or give up 0.06% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Insignificant
Accuracy	98.44%
Values	Daily Returns

Dian Swastatika Sentosa  vs.  Inti Bangun Sejahtera

Dian Swastatika Sentosa

Risk-Adjusted Performance

0 of 100

Very Weak

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

Inti Bangun Sejahtera

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Inti Bangun Sejahtera 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.

Pair Trading with Dian Swastatika and Inti Bangun

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

The idea behind Dian Swastatika Sentosa and Inti Bangun Sejahtera 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 Holdings module to check your current holdings and cash postion to detemine if your portfolio needs rebalancing.