Correlation Between Dimet Public and Finansa Public

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

By analyzing existing cross correlation between Dimet Public and Finansa Public, you can compare the effects of market volatilities on Dimet Public and Finansa Public 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 Dimet Public with a short position of Finansa Public. Check out your portfolio center. Please also check ongoing floating volatility patterns of Dimet Public and Finansa Public.

Diversification Opportunities for Dimet Public and Finansa Public

0.85

Correlation Coefficient

Dimet Public  Finansa Public

Very poor diversification

The 3 months correlation between Dimet and Finansa is 0.85. Overlapping area represents the amount of risk that can be diversified away by holding Dimet Public and Finansa Public in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Finansa Public and Dimet Public 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 Dimet Public are associated (or correlated) with Finansa Public. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Finansa Public has no effect on the direction of Dimet Public i.e., Dimet Public and Finansa Public go up and down completely randomly.

Pair Corralation between Dimet Public and Finansa Public

Assuming the 90 days trading horizon Dimet Public is expected to under-perform the Finansa Public. In addition to that, Dimet Public is 3.19 times more volatile than Finansa Public. It trades about -0.1 of its total potential returns per unit of risk. Finansa Public is currently generating about -0.26 per unit of volatility. If you would invest  200.00  in Finansa Public on December 30, 2024 and sell it today you would lose (81.00) from holding Finansa Public or give up 40.5% of portfolio value over 90 days.

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

Dimet Public  vs.  Finansa Public

Dimet Public

Risk-Adjusted Performance

Very Weak

Over the last 90 days Dimet Public 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 fundamental drivers remain somewhat strong which may send shares a bit higher in April 2025. The current disturbance may also be a sign of long term up-swing for the company investors.

Finansa Public

Risk-Adjusted Performance

Very Weak

Over the last 90 days Finansa Public 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 basic indicators remain quite persistent which may send shares a bit higher in April 2025. The latest mess may also be a sign of long-standing up-swing for the company institutional investors.

Pair Trading with Dimet Public and Finansa Public

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

The idea behind Dimet Public and Finansa Public 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 Transaction History module to view history of all your transactions and understand their impact on performance.