Correlation Between Diagnos Laboratorium and PT Harapan

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

By analyzing existing cross correlation between Diagnos Laboratorium Utama and PT Harapan Duta, you can compare the effects of market volatilities on Diagnos Laboratorium and PT Harapan 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 Diagnos Laboratorium with a short position of PT Harapan. Check out your portfolio center. Please also check ongoing floating volatility patterns of Diagnos Laboratorium and PT Harapan.

Diversification Opportunities for Diagnos Laboratorium and PT Harapan

0.76

Correlation Coefficient

Diagnos Laboratorium  PT Harapan

Poor diversification

The 3 months correlation between Diagnos and HOPE is 0.76. Overlapping area represents the amount of risk that can be diversified away by holding Diagnos Laboratorium Utama and PT Harapan Duta in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on PT Harapan Duta and Diagnos Laboratorium 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 Diagnos Laboratorium Utama are associated (or correlated) with PT Harapan. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of PT Harapan Duta has no effect on the direction of Diagnos Laboratorium i.e., Diagnos Laboratorium and PT Harapan go up and down completely randomly.

Pair Corralation between Diagnos Laboratorium and PT Harapan

Assuming the 90 days trading horizon Diagnos Laboratorium Utama is expected to generate 1.03 times more return on investment than PT Harapan. However, Diagnos Laboratorium is 1.03 times more volatile than PT Harapan Duta. It trades about -0.07 of its potential returns per unit of risk. PT Harapan Duta is currently generating about -0.21 per unit of risk. If you would invest  22,000  in Diagnos Laboratorium Utama on October 10, 2024 and sell it today you would lose (1,400) from holding Diagnos Laboratorium Utama or give up 6.36% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Significant
Accuracy	94.74%
Values	Daily Returns

Diagnos Laboratorium Utama  vs.  PT Harapan Duta

Diagnos Laboratorium

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Diagnos Laboratorium Utama 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.

PT Harapan Duta

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days PT Harapan Duta 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 Diagnos Laboratorium and PT Harapan

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

The idea behind Diagnos Laboratorium Utama and PT Harapan Duta 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 Piotroski F Score module to get Piotroski F Score based on the binary analysis strategy of nine different fundamentals.