Correlation Between Duta Pertiwi and Intiland Development

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

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

Diversification Opportunities for Duta Pertiwi and Intiland Development

0.79

Correlation Coefficient

Duta Pertiwi  Intiland Development

Poor diversification

The 3 months correlation between Duta and Intiland is 0.79. Overlapping area represents the amount of risk that can be diversified away by holding Duta Pertiwi Tbk and Intiland Development Tbk in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Intiland Development Tbk and Duta Pertiwi 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 Duta Pertiwi Tbk are associated (or correlated) with Intiland Development. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Intiland Development Tbk has no effect on the direction of Duta Pertiwi i.e., Duta Pertiwi and Intiland Development go up and down completely randomly.

Pair Corralation between Duta Pertiwi and Intiland Development

Assuming the 90 days trading horizon Duta Pertiwi Tbk is expected to generate 0.89 times more return on investment than Intiland Development. However, Duta Pertiwi Tbk is 1.12 times less risky than Intiland Development. It trades about -0.09 of its potential returns per unit of risk. Intiland Development Tbk is currently generating about -0.19 per unit of risk. If you would invest  362,000  in Duta Pertiwi Tbk on December 30, 2024 and sell it today you would lose (37,000) from holding Duta Pertiwi Tbk or give up 10.22% of portfolio value over 90 days.

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

Duta Pertiwi Tbk  vs.  Intiland Development Tbk

Duta Pertiwi Tbk

Risk-Adjusted Performance

Very Weak

Over the last 90 days Duta Pertiwi 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.

Intiland Development Tbk

Risk-Adjusted Performance

Very Weak

Over the last 90 days Intiland Development Tbk 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 Duta Pertiwi and Intiland Development

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

The idea behind Duta Pertiwi Tbk and Intiland Development Tbk 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 Sync Your Broker module to sync your existing holdings, watchlists, positions or portfolios from thousands of online brokerage services, banks, investment account aggregators and robo-advisors..