Correlation Between DMS Propertindo and Nusantara Almazia

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

By analyzing existing cross correlation between DMS Propertindo Tbk and Nusantara Almazia, you can compare the effects of market volatilities on DMS Propertindo and Nusantara Almazia 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 DMS Propertindo with a short position of Nusantara Almazia. Check out your portfolio center. Please also check ongoing floating volatility patterns of DMS Propertindo and Nusantara Almazia.

Diversification Opportunities for DMS Propertindo and Nusantara Almazia

0.14

Correlation Coefficient

DMS Propertindo  Nusantara Almazia

Average diversification

The 3 months correlation between DMS and Nusantara is 0.14. Overlapping area represents the amount of risk that can be diversified away by holding DMS Propertindo Tbk and Nusantara Almazia in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Nusantara Almazia and DMS Propertindo 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 DMS Propertindo Tbk are associated (or correlated) with Nusantara Almazia. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Nusantara Almazia has no effect on the direction of DMS Propertindo i.e., DMS Propertindo and Nusantara Almazia go up and down completely randomly.

Pair Corralation between DMS Propertindo and Nusantara Almazia

Assuming the 90 days trading horizon DMS Propertindo Tbk is expected to generate 0.97 times more return on investment than Nusantara Almazia. However, DMS Propertindo Tbk is 1.03 times less risky than Nusantara Almazia. It trades about 0.03 of its potential returns per unit of risk. Nusantara Almazia is currently generating about -0.01 per unit of risk. If you would invest  1,000.00  in DMS Propertindo Tbk on September 19, 2024 and sell it today you would earn a total of  0.00  from holding DMS Propertindo Tbk or generate 0.0% return on investment over 90 days.

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

DMS Propertindo Tbk  vs.  Nusantara Almazia

DMS Propertindo Tbk

Risk-Adjusted Performance

2 of 100

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in DMS Propertindo Tbk are ranked lower than 2 (%) of all global equities and portfolios over the last 90 days. Despite quite conflicting forward-looking signals, DMS Propertindo may actually be approaching a critical reversion point that can send shares even higher in January 2025.

Nusantara Almazia

Risk-Adjusted Performance

0 of 100

Very Weak

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

Pair Trading with DMS Propertindo and Nusantara Almazia

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

The idea behind DMS Propertindo Tbk and Nusantara Almazia 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 Comparator module to compare the composition, asset allocations and performance of any two portfolios in your account.