Correlation Between Delta Dunia and Dwi Guna

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

By analyzing existing cross correlation between Delta Dunia Makmur and Dwi Guna Laksana, you can compare the effects of market volatilities on Delta Dunia and Dwi Guna 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 Dunia with a short position of Dwi Guna. Check out your portfolio center. Please also check ongoing floating volatility patterns of Delta Dunia and Dwi Guna.

Diversification Opportunities for Delta Dunia and Dwi Guna

-0.4

Correlation Coefficient

Delta Dunia  Dwi Guna

Very good diversification

The 3 months correlation between Delta and Dwi is -0.4. Overlapping area represents the amount of risk that can be diversified away by holding Delta Dunia Makmur and Dwi Guna Laksana in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Dwi Guna Laksana and Delta Dunia 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 Dunia Makmur are associated (or correlated) with Dwi Guna. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Dwi Guna Laksana has no effect on the direction of Delta Dunia i.e., Delta Dunia and Dwi Guna go up and down completely randomly.

Pair Corralation between Delta Dunia and Dwi Guna

Assuming the 90 days trading horizon Delta Dunia Makmur is expected to generate 0.46 times more return on investment than Dwi Guna. However, Delta Dunia Makmur is 2.19 times less risky than Dwi Guna. It trades about -0.05 of its potential returns per unit of risk. Dwi Guna Laksana is currently generating about -0.36 per unit of risk. If you would invest  55,000  in Delta Dunia Makmur on October 20, 2024 and sell it today you would lose (2,000) from holding Delta Dunia Makmur or give up 3.64% of portfolio value over 90 days.

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

Delta Dunia Makmur  vs.  Dwi Guna Laksana

Delta Dunia Makmur

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Delta Dunia Makmur 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.

Dwi Guna Laksana

Risk-Adjusted Performance

8 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Dwi Guna Laksana are ranked lower than 8 (%) of all global equities and portfolios over the last 90 days. Despite quite conflicting forward-looking signals, Dwi Guna disclosed solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Delta Dunia and Dwi Guna

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

The idea behind Delta Dunia Makmur and Dwi Guna Laksana 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 Rebalancing module to analyze risk-adjusted returns against different time horizons to find asset-allocation targets.