Correlation Between Asia Sejahtera and Dharma Satya

Can any of the company-specific risk be diversified away by investing in both Asia Sejahtera and Dharma Satya 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 Asia Sejahtera and Dharma Satya into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Asia Sejahtera Mina and Dharma Satya Nusantara, you can compare the effects of market volatilities on Asia Sejahtera and Dharma Satya 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 Asia Sejahtera with a short position of Dharma Satya. Check out your portfolio center. Please also check ongoing floating volatility patterns of Asia Sejahtera and Dharma Satya.

Diversification Opportunities for Asia Sejahtera and Dharma Satya

0.12

Correlation Coefficient

Asia Sejahtera  Dharma Satya

Average diversification

The 3 months correlation between Asia and Dharma is 0.12. Overlapping area represents the amount of risk that can be diversified away by holding Asia Sejahtera Mina and Dharma Satya Nusantara in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Dharma Satya Nusantara and Asia Sejahtera 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 Asia Sejahtera Mina are associated (or correlated) with Dharma Satya. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Dharma Satya Nusantara has no effect on the direction of Asia Sejahtera i.e., Asia Sejahtera and Dharma Satya go up and down completely randomly.

Pair Corralation between Asia Sejahtera and Dharma Satya

Assuming the 90 days trading horizon Asia Sejahtera Mina is expected to generate 1.98 times more return on investment than Dharma Satya. However, Asia Sejahtera is 1.98 times more volatile than Dharma Satya Nusantara. It trades about 0.22 of its potential returns per unit of risk. Dharma Satya Nusantara is currently generating about 0.13 per unit of risk. If you would invest  9,000  in Asia Sejahtera Mina on March 5, 2024 and sell it today you would earn a total of  8,800  from holding Asia Sejahtera Mina or generate 97.78% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Insignificant
Accuracy	98.08%
Values	Daily Returns

Asia Sejahtera Mina  vs.  Dharma Satya Nusantara

Asia Sejahtera Mina

Risk-Adjusted Performance

17 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Asia Sejahtera Mina are ranked lower than 17 (%) of all global equities and portfolios over the last 90 days. Despite quite conflicting basic indicators, Asia Sejahtera disclosed solid returns over the last few months and may actually be approaching a breakup point.

Dharma Satya Nusantara

Risk-Adjusted Performance

10 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Dharma Satya Nusantara are ranked lower than 10 (%) of all global equities and portfolios over the last 90 days. Despite quite conflicting basic indicators, Dharma Satya disclosed solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Asia Sejahtera and Dharma Satya

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

The idea behind Asia Sejahtera Mina and Dharma Satya Nusantara 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 Theme Ratings module to determine theme ratings based on digital equity recommendations. Macroaxis theme ratings are based on combination of fundamental analysis and risk-adjusted market performance.