Correlation Between PT Data and PT Dewi

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

By analyzing existing cross correlation between PT Data Sinergitama and PT Dewi Shri, you can compare the effects of market volatilities on PT Data and PT Dewi 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 Data with a short position of PT Dewi. Check out your portfolio center. Please also check ongoing floating volatility patterns of PT Data and PT Dewi.

Diversification Opportunities for PT Data and PT Dewi

0.41

Correlation Coefficient

PT Data  PT Dewi

Very weak diversification

The 3 months correlation between ELIT and DEWI is 0.41. Overlapping area represents the amount of risk that can be diversified away by holding PT Data Sinergitama and PT Dewi Shri in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on PT Dewi Shri and PT Data 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 Data Sinergitama are associated (or correlated) with PT Dewi. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of PT Dewi Shri has no effect on the direction of PT Data i.e., PT Data and PT Dewi go up and down completely randomly.

Pair Corralation between PT Data and PT Dewi

Assuming the 90 days trading horizon PT Data is expected to generate 1.3 times less return on investment than PT Dewi. In addition to that, PT Data is 1.49 times more volatile than PT Dewi Shri. It trades about 0.06 of its total potential returns per unit of risk. PT Dewi Shri is currently generating about 0.11 per unit of volatility. If you would invest  7,500  in PT Dewi Shri on September 8, 2024 and sell it today you would earn a total of  1,000.00  from holding PT Dewi Shri or generate 13.33% return on investment over 90 days.

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

PT Data Sinergitama  vs.  PT Dewi Shri

PT Data Sinergitama

Risk-Adjusted Performance

4 of 100

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 Shri

Risk-Adjusted Performance

8 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in PT Dewi Shri are ranked lower than 8 (%) 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.

Pair Trading with PT Data and PT Dewi

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

The idea behind PT Data Sinergitama and PT Dewi Shri 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 File Import module to quickly import all of your third-party portfolios from your local drive in csv format.