Correlation Between Dosni Roha and Steady Safe

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

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

Diversification Opportunities for Dosni Roha and Steady Safe

-0.87

Correlation Coefficient

Dosni Roha  Steady Safe

Pay attention - limited upside

The 3 months correlation between Dosni and Steady is -0.87. Overlapping area represents the amount of risk that can be diversified away by holding Dosni Roha Indonesia and Steady Safe TBK in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Steady Safe TBK and Dosni Roha 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 Dosni Roha Indonesia are associated (or correlated) with Steady Safe. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Steady Safe TBK has no effect on the direction of Dosni Roha i.e., Dosni Roha and Steady Safe go up and down completely randomly.

Pair Corralation between Dosni Roha and Steady Safe

Assuming the 90 days trading horizon Dosni Roha Indonesia is expected to under-perform the Steady Safe. But the stock apears to be less risky and, when comparing its historical volatility, Dosni Roha Indonesia is 3.85 times less risky than Steady Safe. The stock trades about -0.27 of its potential returns per unit of risk. The Steady Safe TBK is currently generating about 0.02 of returns per unit of risk over similar time horizon. If you would invest  37,000  in Steady Safe TBK on August 12, 2024 and sell it today you would lose (1,000.00) from holding Steady Safe TBK or give up 2.7% of portfolio value over 90 days.

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

Dosni Roha Indonesia  vs.  Steady Safe TBK

Dosni Roha Indonesia

Risk-Adjusted Performance

0 of 100

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 conflicting performance in the last few months, the Stock's forward-looking signals remain quite persistent which may send shares a bit higher in December 2024. The latest mess may also be a sign of long-standing up-swing for the company institutional investors.

Steady Safe TBK

Risk-Adjusted Performance

12 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Steady Safe TBK are ranked lower than 12 (%) 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.

Pair Trading with Dosni Roha and Steady Safe

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

The idea behind Dosni Roha Indonesia and Steady Safe TBK 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.

Check out your portfolio center.

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 Center module to all portfolio management and optimization tools to improve performance of your portfolios.