Correlation Between HEXINDO ADIPERKASA and Dermapharm Holding

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

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

Diversification Opportunities for HEXINDO ADIPERKASA and Dermapharm Holding

0.0

Correlation Coefficient

HEXINDO ADIPERKASA  Dermapharm Holding

Pay attention - limited upside

The 3 months correlation between HEXINDO and Dermapharm is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding HEXINDO ADIPERKASA and Dermapharm Holding SE in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Dermapharm Holding and HEXINDO ADIPERKASA 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 HEXINDO ADIPERKASA are associated (or correlated) with Dermapharm Holding. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Dermapharm Holding has no effect on the direction of HEXINDO ADIPERKASA i.e., HEXINDO ADIPERKASA and Dermapharm Holding go up and down completely randomly.

Pair Corralation between HEXINDO ADIPERKASA and Dermapharm Holding

If you would invest  3,195  in Dermapharm Holding SE on October 15, 2024 and sell it today you would earn a total of  810.00  from holding Dermapharm Holding SE or generate 25.35% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Flat
Strength	Insignificant
Accuracy	0.0%
Values	Daily Returns

HEXINDO ADIPERKASA  vs.  Dermapharm Holding SE

HEXINDO ADIPERKASA

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days HEXINDO ADIPERKASA has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of comparatively stable basic indicators, HEXINDO ADIPERKASA is not utilizing all of its potentials. The current stock price uproar, may contribute to short-horizon losses for the private investors.

Dermapharm Holding

Risk-Adjusted Performance

14 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Dermapharm Holding SE are ranked lower than 14 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively fragile basic indicators, Dermapharm Holding unveiled solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with HEXINDO ADIPERKASA and Dermapharm Holding

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

The idea behind HEXINDO ADIPERKASA and Dermapharm Holding SE 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 Options Analysis module to analyze and evaluate options and option chains as a potential hedge for your portfolios.