Correlation Between Steady Safe and Dosni Roha

Can any of the company-specific risk be diversified away by investing in both Steady Safe and Dosni Roha 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 Steady Safe and Dosni Roha into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Steady Safe TBK and Dosni Roha Indonesia, you can compare the effects of market volatilities on Steady Safe and Dosni Roha 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 Steady Safe with a short position of Dosni Roha. Check out your portfolio center. Please also check ongoing floating volatility patterns of Steady Safe and Dosni Roha.

Diversification Opportunities for Steady Safe and Dosni Roha

-0.24

Correlation Coefficient

Steady Safe  Dosni Roha

Very good diversification

The 3 months correlation between Steady and Dosni is -0.24. Overlapping area represents the amount of risk that can be diversified away by holding Steady Safe TBK and Dosni Roha Indonesia in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Dosni Roha Indonesia and Steady Safe 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 Steady Safe TBK are associated (or correlated) with Dosni Roha. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Dosni Roha Indonesia has no effect on the direction of Steady Safe i.e., Steady Safe and Dosni Roha go up and down completely randomly.

Pair Corralation between Steady Safe and Dosni Roha

Assuming the 90 days trading horizon Steady Safe TBK is expected to generate 6.12 times more return on investment than Dosni Roha. However, Steady Safe is 6.12 times more volatile than Dosni Roha Indonesia. It trades about 0.06 of its potential returns per unit of risk. Dosni Roha Indonesia is currently generating about -0.09 per unit of risk. If you would invest  19,800  in Steady Safe TBK on December 30, 2024 and sell it today you would earn a total of  2,200  from holding Steady Safe TBK or generate 11.11% return on investment over 90 days.

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

Steady Safe TBK  vs.  Dosni Roha Indonesia

Steady Safe TBK

Risk-Adjusted Performance

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in Steady Safe TBK are ranked lower than 4 (%) of all global equities and portfolios over the last 90 days. Despite quite conflicting forward-looking signals, Steady Safe disclosed solid returns over the last few months and may actually be approaching a breakup point.

Dosni Roha Indonesia

Risk-Adjusted Performance

Very Weak

Over the last 90 days Dosni Roha Indonesia 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.

Pair Trading with Steady Safe and Dosni Roha

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

The idea behind Steady Safe TBK and Dosni Roha Indonesia 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 Portfolio Comparator module to compare the composition, asset allocations and performance of any two portfolios in your account.