Correlation Between Delta Djakarta and Akasha Wira

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

By analyzing existing cross correlation between Delta Djakarta Tbk and Akasha Wira International, you can compare the effects of market volatilities on Delta Djakarta and Akasha Wira 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 Delta Djakarta with a short position of Akasha Wira. Check out your portfolio center. Please also check ongoing floating volatility patterns of Delta Djakarta and Akasha Wira.

Diversification Opportunities for Delta Djakarta and Akasha Wira

0.38

Correlation Coefficient

Delta Djakarta  Akasha Wira

Weak diversification

The 3 months correlation between Delta and Akasha is 0.38. Overlapping area represents the amount of risk that can be diversified away by holding Delta Djakarta Tbk and Akasha Wira International in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Akasha Wira International and Delta Djakarta 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 Delta Djakarta Tbk are associated (or correlated) with Akasha Wira. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Akasha Wira International has no effect on the direction of Delta Djakarta i.e., Delta Djakarta and Akasha Wira go up and down completely randomly.

Pair Corralation between Delta Djakarta and Akasha Wira

Assuming the 90 days trading horizon Delta Djakarta Tbk is expected to under-perform the Akasha Wira. But the stock apears to be less risky and, when comparing its historical volatility, Delta Djakarta Tbk is 1.41 times less risky than Akasha Wira. The stock trades about -0.13 of its potential returns per unit of risk. The Akasha Wira International is currently generating about -0.01 of returns per unit of risk over similar time horizon. If you would invest  997,500  in Akasha Wira International on September 3, 2024 and sell it today you would lose (22,500) from holding Akasha Wira International or give up 2.26% of portfolio value over 90 days.

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

Delta Djakarta Tbk  vs.  Akasha Wira International

Delta Djakarta Tbk

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Delta Djakarta Tbk has generated negative risk-adjusted returns adding no value to investors with long positions. Despite latest conflicting performance, the Stock's forward-looking signals remain persistent and the latest mess on Wall Street may also be a sign of long-standing gains for the company institutional investors.

Akasha Wira International

Risk-Adjusted Performance

0 of 100

Very Weak

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

Pair Trading with Delta Djakarta and Akasha Wira

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

The idea behind Delta Djakarta Tbk and Akasha Wira 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 Odds Of Bankruptcy module to get analysis of equity chance of financial distress in the next 2 years.