Correlation Between Hoffmen Cleanindo and Dunia Virtual

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

By analyzing existing cross correlation between Hoffmen Cleanindo and Dunia Virtual Online, you can compare the effects of market volatilities on Hoffmen Cleanindo and Dunia Virtual 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 Hoffmen Cleanindo with a short position of Dunia Virtual. Check out your portfolio center. Please also check ongoing floating volatility patterns of Hoffmen Cleanindo and Dunia Virtual.

Diversification Opportunities for Hoffmen Cleanindo and Dunia Virtual

0.16

Correlation Coefficient

Hoffmen Cleanindo  Dunia Virtual

Average diversification

The 3 months correlation between Hoffmen and Dunia is 0.16. Overlapping area represents the amount of risk that can be diversified away by holding Hoffmen Cleanindo and Dunia Virtual Online in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Dunia Virtual Online and Hoffmen Cleanindo 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 Hoffmen Cleanindo are associated (or correlated) with Dunia Virtual. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Dunia Virtual Online has no effect on the direction of Hoffmen Cleanindo i.e., Hoffmen Cleanindo and Dunia Virtual go up and down completely randomly.

Pair Corralation between Hoffmen Cleanindo and Dunia Virtual

Assuming the 90 days trading horizon Hoffmen Cleanindo is expected to generate 3.18 times less return on investment than Dunia Virtual. But when comparing it to its historical volatility, Hoffmen Cleanindo is 2.41 times less risky than Dunia Virtual. It trades about 0.19 of its potential returns per unit of risk. Dunia Virtual Online is currently generating about 0.25 of returns per unit of risk over similar time horizon. If you would invest  22,600  in Dunia Virtual Online on December 5, 2024 and sell it today you would earn a total of  24,200  from holding Dunia Virtual Online or generate 107.08% return on investment over 90 days.

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

Hoffmen Cleanindo  vs.  Dunia Virtual Online

Hoffmen Cleanindo

Risk-Adjusted Performance

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Hoffmen Cleanindo are ranked lower than 15 (%) of all global equities and portfolios over the last 90 days. Despite quite conflicting forward-looking signals, Hoffmen Cleanindo disclosed solid returns over the last few months and may actually be approaching a breakup point.

Dunia Virtual Online

Risk-Adjusted Performance

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in Dunia Virtual Online are ranked lower than 20 (%) of all global equities and portfolios over the last 90 days. Despite quite conflicting forward-looking signals, Dunia Virtual disclosed solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Hoffmen Cleanindo and Dunia Virtual

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

The idea behind Hoffmen Cleanindo and Dunia Virtual Online 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.