Correlation Between PAM Mineral and PT Dewi

Specify exactly 2 symbols:
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

0.16
  Correlation Coefficient

Average diversification

The 3 months correlation between PAM and DEWI is 0.16. 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 3.68 times less return on investment than PT Dewi. In addition to that, PAM Mineral is 1.18 times more volatile than PT Dewi Shri. It trades about 0.03 of its total potential returns per unit of risk. PT Dewi Shri is currently generating about 0.12 per unit of volatility. If you would invest  7,400  in PT Dewi Shri on September 10, 2024 and sell it today you would earn a total of  1,100  from holding PT Dewi Shri or generate 14.86% return on investment over 90 days.
Time Period3 Months [change]
DirectionMoves Together 
StrengthInsignificant
Accuracy100.0%
ValuesDaily Returns

PAM Mineral Tbk  vs.  PT Dewi Shri

 Performance 
       Timeline  
PAM Mineral Tbk 

Risk-Adjusted Performance

2 of 100

 
Weak
 
Strong
Weak
Compared to the overall equity markets, risk-adjusted returns on investments in PAM Mineral Tbk are ranked lower than 2 (%) of all global equities and portfolios over the last 90 days. Despite quite persistent forward-looking signals, PAM Mineral is not utilizing all of its potentials. The latest stock price mess, may contribute to short-term losses for the institutional investors.
PT Dewi Shri 

Risk-Adjusted Performance

9 of 100

 
Weak
 
Strong
OK
Compared to the overall equity markets, risk-adjusted returns on investments in PT Dewi Shri are ranked lower than 9 (%) 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.

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.
The idea behind PAM Mineral Tbk 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.
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 AI Portfolio Architect module to use AI to generate optimal portfolios and find profitable investment opportunities.

Other Complementary Tools

Top Crypto Exchanges
Search and analyze digital assets across top global cryptocurrency exchanges
CEOs Directory
Screen CEOs from public companies around the world
Volatility Analysis
Get historical volatility and risk analysis based on latest market data
Equity Forecasting
Use basic forecasting models to generate price predictions and determine price momentum
Funds Screener
Find actively-traded funds from around the world traded on over 30 global exchanges