Correlation Between PT Dewi and Pioneerindo Gourmet

Can any of the company-specific risk be diversified away by investing in both PT Dewi and Pioneerindo Gourmet 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 PT Dewi and Pioneerindo Gourmet into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between PT Dewi Shri and Pioneerindo Gourmet International, you can compare the effects of market volatilities on PT Dewi and Pioneerindo Gourmet 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 PT Dewi with a short position of Pioneerindo Gourmet. Check out your portfolio center. Please also check ongoing floating volatility patterns of PT Dewi and Pioneerindo Gourmet.

Diversification Opportunities for PT Dewi and Pioneerindo Gourmet

-0.48

Correlation Coefficient

PT Dewi  Pioneerindo Gourmet

Very good diversification

The 3 months correlation between DEWI and Pioneerindo is -0.48. Overlapping area represents the amount of risk that can be diversified away by holding PT Dewi Shri and Pioneerindo Gourmet Internatio in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Pioneerindo Gourmet and PT Dewi 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 PT Dewi Shri are associated (or correlated) with Pioneerindo Gourmet. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Pioneerindo Gourmet has no effect on the direction of PT Dewi i.e., PT Dewi and Pioneerindo Gourmet go up and down completely randomly.

Pair Corralation between PT Dewi and Pioneerindo Gourmet

Assuming the 90 days trading horizon PT Dewi Shri is expected to under-perform the Pioneerindo Gourmet. But the stock apears to be less risky and, when comparing its historical volatility, PT Dewi Shri is 1.35 times less risky than Pioneerindo Gourmet. The stock trades about -0.03 of its potential returns per unit of risk. The Pioneerindo Gourmet International is currently generating about -0.01 of returns per unit of risk over similar time horizon. If you would invest  269,000  in Pioneerindo Gourmet International on October 11, 2024 and sell it today you would lose (184,000) from holding Pioneerindo Gourmet International or give up 68.4% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Very Weak
Accuracy	99.79%
Values	Daily Returns

PT Dewi Shri  vs.  Pioneerindo Gourmet Internatio

PT Dewi Shri

Risk-Adjusted Performance

3 of 100

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in PT Dewi Shri are ranked lower than 3 (%) of all global equities and portfolios over the last 90 days. Despite quite conflicting forward-looking signals, PT Dewi may actually be approaching a critical reversion point that can send shares even higher in February 2025.

Pioneerindo Gourmet

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Pioneerindo Gourmet International has generated negative risk-adjusted returns adding no value to investors with long positions. Despite conflicting performance in the last few months, the Stock's forward-looking signals remain quite persistent which may send shares a bit higher in February 2025. The latest mess may also be a sign of long-standing up-swing for the company institutional investors.

Pair Trading with PT Dewi and Pioneerindo Gourmet

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

The idea behind PT Dewi Shri and Pioneerindo Gourmet International 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 Theme Ratings module to determine theme ratings based on digital equity recommendations. Macroaxis theme ratings are based on combination of fundamental analysis and risk-adjusted market performance.