Correlation Between Delta Dunia and TBS Energi

Can any of the company-specific risk be diversified away by investing in both Delta Dunia and TBS Energi 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 TBS Energi 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 TBS Energi Utama, you can compare the effects of market volatilities on Delta Dunia and TBS Energi 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 TBS Energi. Check out your portfolio center. Please also check ongoing floating volatility patterns of Delta Dunia and TBS Energi.

Diversification Opportunities for Delta Dunia and TBS Energi

0.74

Correlation Coefficient

Delta Dunia  TBS Energi

Poor diversification

The 3 months correlation between Delta and TBS is 0.74. Overlapping area represents the amount of risk that can be diversified away by holding Delta Dunia Makmur and TBS Energi Utama in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on TBS Energi Utama 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 TBS Energi. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of TBS Energi Utama has no effect on the direction of Delta Dunia i.e., Delta Dunia and TBS Energi go up and down completely randomly.

Pair Corralation between Delta Dunia and TBS Energi

Assuming the 90 days trading horizon Delta Dunia Makmur is expected to under-perform the TBS Energi. But the stock apears to be less risky and, when comparing its historical volatility, Delta Dunia Makmur is 1.41 times less risky than TBS Energi. The stock trades about -0.21 of its potential returns per unit of risk. The TBS Energi Utama is currently generating about -0.1 of returns per unit of risk over similar time horizon. If you would invest  40,000  in TBS Energi Utama on December 26, 2024 and sell it today you would lose (10,200) from holding TBS Energi Utama or give up 25.5% of portfolio value over 90 days.

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

Delta Dunia Makmur  vs.  TBS Energi Utama

Delta Dunia Makmur

Risk-Adjusted Performance

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 April 2025. The latest mess may also be a sign of long-standing up-swing for the company institutional investors.

TBS Energi Utama

Risk-Adjusted Performance

Very Weak

Over the last 90 days TBS Energi 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 April 2025. The latest mess may also be a sign of long-standing up-swing for the company institutional investors.

Pair Trading with Delta Dunia and TBS Energi

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

The idea behind Delta Dunia Makmur and TBS Energi Utama 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 Analyst Advice module to analyst recommendations and target price estimates broken down by several categories.