Correlation Between PAM Mineral and PT Dewi
Can any of the company-specific risk be diversified away by investing in both PAM Mineral 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 PAM Mineral and PT Dewi into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between PAM Mineral Tbk and PT Dewi Shri, you can compare the effects of market volatilities on PAM Mineral 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 PAM Mineral with a short position of PT Dewi. Check out your portfolio center. Please also check ongoing floating volatility patterns of PAM Mineral and PT Dewi.
Diversification Opportunities for PAM Mineral and PT Dewi
0.07 | Correlation Coefficient |
Significant diversification
The 3 months correlation between PAM and DEWI is 0.07. Overlapping area represents the amount of risk that can be diversified away by holding PAM Mineral Tbk 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 PAM Mineral 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 PAM Mineral Tbk 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 PAM Mineral i.e., PAM Mineral and PT Dewi go up and down completely randomly.
Pair Corralation between PAM Mineral and PT Dewi
Assuming the 90 days trading horizon PAM Mineral is expected to generate 2.21 times less return on investment than PT Dewi. In addition to that, PAM Mineral is 1.21 times more volatile than PT Dewi Shri. It trades about 0.05 of its total potential returns per unit of risk. PT Dewi Shri is currently generating about 0.13 per unit of volatility. If you would invest 7,400 in PT Dewi Shri on September 6, 2024 and sell it today you would earn a total of 1,200 from holding PT Dewi Shri or generate 16.22% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Together |
Strength | Insignificant |
Accuracy | 98.41% |
Values | Daily Returns |
PAM Mineral Tbk vs. PT Dewi Shri
Performance |
Timeline |
PAM Mineral Tbk |
PT Dewi Shri |
PAM Mineral and PT Dewi Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with PAM Mineral and PT Dewi
The main advantage of trading using opposite PAM Mineral and PT Dewi positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if PAM Mineral 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.PAM Mineral vs. Archi Indonesia Tbk | PAM Mineral vs. Bumi Resources Minerals | PAM Mineral vs. Bank Panin Syariah | PAM Mineral vs. Central Omega Resources |
PT Dewi vs. PT Cilacap Samudera | PT Dewi vs. Habco Trans Maritima | PT Dewi vs. PT Arkora Hydro | PT Dewi vs. PT Jhonlin Agro |
Check out your portfolio center.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 Alpha Finder module to use alpha and beta coefficients to find investment opportunities after accounting for the risk.
Other Complementary Tools
Piotroski F Score Get Piotroski F Score based on the binary analysis strategy of nine different fundamentals | |
Portfolio Analyzer Portfolio analysis module that provides access to portfolio diagnostics and optimization engine | |
Crypto Correlations Use cryptocurrency correlation module to diversify your cryptocurrency portfolio across multiple coins | |
Portfolio Dashboard Portfolio dashboard that provides centralized access to all your investments | |
Bollinger Bands Use Bollinger Bands indicator to analyze target price for a given investing horizon |