Correlation Between Suryamas Dutamakmur and Diamond Citra

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

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

Diversification Opportunities for Suryamas Dutamakmur and Diamond Citra

-0.34

Correlation Coefficient

Suryamas Dutamakmur  Diamond Citra

Very good diversification

The 3 months correlation between Suryamas and Diamond is -0.34. Overlapping area represents the amount of risk that can be diversified away by holding Suryamas Dutamakmur Tbk and Diamond Citra Propertindo in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Diamond Citra Propertindo and Suryamas Dutamakmur 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 Suryamas Dutamakmur Tbk are associated (or correlated) with Diamond Citra. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Diamond Citra Propertindo has no effect on the direction of Suryamas Dutamakmur i.e., Suryamas Dutamakmur and Diamond Citra go up and down completely randomly.

Pair Corralation between Suryamas Dutamakmur and Diamond Citra

Assuming the 90 days trading horizon Suryamas Dutamakmur is expected to generate 15.93 times less return on investment than Diamond Citra. But when comparing it to its historical volatility, Suryamas Dutamakmur Tbk is 17.78 times less risky than Diamond Citra. It trades about 0.05 of its potential returns per unit of risk. Diamond Citra Propertindo is currently generating about 0.04 of returns per unit of risk over similar time horizon. If you would invest  800.00  in Diamond Citra Propertindo on September 25, 2024 and sell it today you would earn a total of  0.00  from holding Diamond Citra Propertindo or generate 0.0% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Insignificant
Accuracy	97.62%
Values	Daily Returns

Suryamas Dutamakmur Tbk  vs.  Diamond Citra Propertindo

Suryamas Dutamakmur Tbk

Risk-Adjusted Performance

11 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Suryamas Dutamakmur Tbk are ranked lower than 11 (%) of all global equities and portfolios over the last 90 days. Despite quite conflicting forward-looking signals, Suryamas Dutamakmur may actually be approaching a critical reversion point that can send shares even higher in January 2025.

Diamond Citra Propertindo

Risk-Adjusted Performance

3 of 100

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in Diamond Citra Propertindo are ranked lower than 3 (%) of all global equities and portfolios over the last 90 days. Despite quite conflicting forward-looking signals, Diamond Citra disclosed solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Suryamas Dutamakmur and Diamond Citra

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

The idea behind Suryamas Dutamakmur Tbk and Diamond Citra Propertindo 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 Bonds Directory module to find actively traded corporate debentures issued by US companies.