Correlation Between DMS Propertindo and Karya Bersama

Can any of the company-specific risk be diversified away by investing in both DMS Propertindo and Karya Bersama 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 DMS Propertindo and Karya Bersama into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between DMS Propertindo Tbk and Karya Bersama Anugerah, you can compare the effects of market volatilities on DMS Propertindo and Karya Bersama 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 DMS Propertindo with a short position of Karya Bersama. Check out your portfolio center. Please also check ongoing floating volatility patterns of DMS Propertindo and Karya Bersama.

Diversification Opportunities for DMS Propertindo and Karya Bersama

0.21

Correlation Coefficient

DMS Propertindo  Karya Bersama

Modest diversification

The 3 months correlation between DMS and Karya is 0.21. Overlapping area represents the amount of risk that can be diversified away by holding DMS Propertindo Tbk and Karya Bersama Anugerah in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Karya Bersama Anugerah and DMS Propertindo 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 DMS Propertindo Tbk are associated (or correlated) with Karya Bersama. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Karya Bersama Anugerah has no effect on the direction of DMS Propertindo i.e., DMS Propertindo and Karya Bersama go up and down completely randomly.

Pair Corralation between DMS Propertindo and Karya Bersama

Assuming the 90 days trading horizon DMS Propertindo Tbk is expected to under-perform the Karya Bersama. In addition to that, DMS Propertindo is 3.37 times more volatile than Karya Bersama Anugerah. It trades about -0.05 of its total potential returns per unit of risk. Karya Bersama Anugerah is currently generating about -0.14 per unit of volatility. If you would invest  2,200  in Karya Bersama Anugerah on October 24, 2024 and sell it today you would lose (200.00) from holding Karya Bersama Anugerah or give up 9.09% of portfolio value over 90 days.

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

DMS Propertindo Tbk  vs.  Karya Bersama Anugerah

DMS Propertindo Tbk

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days DMS Propertindo Tbk has generated negative risk-adjusted returns adding no value to investors with long positions. Despite quite persistent forward-looking signals, DMS Propertindo is not utilizing all of its potentials. The latest stock price mess, may contribute to short-term losses for the institutional investors.

Karya Bersama Anugerah

Risk-Adjusted Performance

0 of 100

Weak

Over the last 90 days Karya Bersama Anugerah has generated negative risk-adjusted returns adding no value to investors with long positions. Despite quite persistent forward-looking signals, Karya Bersama is not utilizing all of its potentials. The latest stock price mess, may contribute to short-term losses for the institutional investors.

Pair Trading with DMS Propertindo and Karya Bersama

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

The idea behind DMS Propertindo Tbk and Karya Bersama Anugerah 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.