Correlation Between Perusahaan Perseroan and Daimler Truck

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

By analyzing existing cross correlation between Perusahaan Perseroan PT and Daimler Truck Holding, you can compare the effects of market volatilities on Perusahaan Perseroan and Daimler Truck 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 Perusahaan Perseroan with a short position of Daimler Truck. Check out your portfolio center. Please also check ongoing floating volatility patterns of Perusahaan Perseroan and Daimler Truck.

Diversification Opportunities for Perusahaan Perseroan and Daimler Truck

-0.52

Correlation Coefficient

Perusahaan Perseroan  Daimler Truck

Excellent diversification

The 3 months correlation between Perusahaan and Daimler is -0.52. Overlapping area represents the amount of risk that can be diversified away by holding Perusahaan Perseroan PT and Daimler Truck Holding in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Daimler Truck Holding and Perusahaan Perseroan 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 Perusahaan Perseroan PT are associated (or correlated) with Daimler Truck. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Daimler Truck Holding has no effect on the direction of Perusahaan Perseroan i.e., Perusahaan Perseroan and Daimler Truck go up and down completely randomly.

Pair Corralation between Perusahaan Perseroan and Daimler Truck

Assuming the 90 days horizon Perusahaan Perseroan PT is expected to under-perform the Daimler Truck. In addition to that, Perusahaan Perseroan is 1.5 times more volatile than Daimler Truck Holding. It trades about -0.04 of its total potential returns per unit of risk. Daimler Truck Holding is currently generating about 0.15 per unit of volatility. If you would invest  3,107  in Daimler Truck Holding on September 13, 2024 and sell it today you would earn a total of  597.00  from holding Daimler Truck Holding or generate 19.21% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Very Weak
Accuracy	98.46%
Values	Daily Returns

Perusahaan Perseroan PT  vs.  Daimler Truck Holding

Perusahaan Perseroan

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Perusahaan Perseroan PT has generated negative risk-adjusted returns adding no value to investors with long positions. Despite latest fragile performance, the Stock's basic indicators remain stable and the current disturbance on Wall Street may also be a sign of long-run gains for the company stockholders.

Daimler Truck Holding

Risk-Adjusted Performance

11 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Daimler Truck Holding are ranked lower than 11 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively uncertain technical and fundamental indicators, Daimler Truck unveiled solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Perusahaan Perseroan and Daimler Truck

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

The idea behind Perusahaan Perseroan PT and Daimler Truck Holding 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 Money Flow Index module to determine momentum by analyzing Money Flow Index and other technical indicators.