Correlation Between Perintis Triniti and Diamond Citra

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

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

Diversification Opportunities for Perintis Triniti and Diamond Citra

0.21

Correlation Coefficient

Perintis Triniti  Diamond Citra

Modest diversification

The 3 months correlation between Perintis and Diamond is 0.21. Overlapping area represents the amount of risk that can be diversified away by holding Perintis Triniti Properti 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 Perintis Triniti 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 Perintis Triniti Properti 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 Perintis Triniti i.e., Perintis Triniti and Diamond Citra go up and down completely randomly.

Pair Corralation between Perintis Triniti and Diamond Citra

Assuming the 90 days trading horizon Perintis Triniti Properti is expected to under-perform the Diamond Citra. But the stock apears to be less risky and, when comparing its historical volatility, Perintis Triniti Properti is 3.65 times less risky than Diamond Citra. The stock trades about -0.03 of its potential returns per unit of risk. The Diamond Citra Propertindo is currently generating about 0.06 of returns per unit of risk over similar time horizon. If you would invest  800.00  in Diamond Citra Propertindo on September 14, 2024 and sell it today you would earn a total of  100.00  from holding Diamond Citra Propertindo or generate 12.5% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Very Weak
Accuracy	100.0%
Values	Daily Returns

Perintis Triniti Properti  vs.  Diamond Citra Propertindo

Perintis Triniti Properti

Risk-Adjusted Performance

0 of 100

Very Weak

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

Diamond Citra Propertindo

Risk-Adjusted Performance

4 of 100

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in Diamond Citra Propertindo are ranked lower than 4 (%) 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 Perintis Triniti and Diamond Citra

The main advantage of trading using opposite Perintis Triniti and Diamond Citra positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Perintis Triniti 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 Perintis Triniti Properti 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 Portfolio Anywhere module to track or share privately all of your investments from the convenience of any device.