Correlation Between Dwi Guna and Alfa Energi

Can any of the company-specific risk be diversified away by investing in both Dwi Guna and Alfa Energi 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 Dwi Guna and Alfa Energi into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Dwi Guna Laksana and Alfa Energi Investama, you can compare the effects of market volatilities on Dwi Guna and Alfa Energi 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 Dwi Guna with a short position of Alfa Energi. Check out your portfolio center. Please also check ongoing floating volatility patterns of Dwi Guna and Alfa Energi.

Diversification Opportunities for Dwi Guna and Alfa Energi

-0.89

Correlation Coefficient

Dwi Guna  Alfa Energi

Pay attention - limited upside

The 3 months correlation between Dwi and Alfa is -0.89. Overlapping area represents the amount of risk that can be diversified away by holding Dwi Guna Laksana and Alfa Energi Investama in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Alfa Energi Investama and Dwi Guna 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 Dwi Guna Laksana are associated (or correlated) with Alfa Energi. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Alfa Energi Investama has no effect on the direction of Dwi Guna i.e., Dwi Guna and Alfa Energi go up and down completely randomly.

Pair Corralation between Dwi Guna and Alfa Energi

If you would invest  27,600  in Dwi Guna Laksana on September 16, 2024 and sell it today you would earn a total of  0.00  from holding Dwi Guna Laksana or generate 0.0% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Significant
Accuracy	95.24%
Values	Daily Returns

Dwi Guna Laksana  vs.  Alfa Energi Investama

Dwi Guna Laksana

Risk-Adjusted Performance

18 of 100

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in Dwi Guna Laksana are ranked lower than 18 (%) of all global equities and portfolios over the last 90 days. Despite quite conflicting forward-looking signals, Dwi Guna disclosed solid returns over the last few months and may actually be approaching a breakup point.

Alfa Energi Investama

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Alfa Energi Investama 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 Dwi Guna and Alfa Energi

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

The idea behind Dwi Guna Laksana and Alfa Energi Investama 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 AI Portfolio Architect module to use AI to generate optimal portfolios and find profitable investment opportunities.