Correlation Between Asuransi Harta and Pudjiadi Sons
Can any of the company-specific risk be diversified away by investing in both Asuransi Harta and Pudjiadi Sons 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 Asuransi Harta and Pudjiadi Sons into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Asuransi Harta Aman and Pudjiadi Sons Tbk, you can compare the effects of market volatilities on Asuransi Harta and Pudjiadi Sons 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 Asuransi Harta with a short position of Pudjiadi Sons. Check out your portfolio center. Please also check ongoing floating volatility patterns of Asuransi Harta and Pudjiadi Sons.
Diversification Opportunities for Asuransi Harta and Pudjiadi Sons
-0.71 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Asuransi and Pudjiadi is -0.71. Overlapping area represents the amount of risk that can be diversified away by holding Asuransi Harta Aman and Pudjiadi Sons Tbk in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Pudjiadi Sons Tbk and Asuransi Harta 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 Asuransi Harta Aman are associated (or correlated) with Pudjiadi Sons. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Pudjiadi Sons Tbk has no effect on the direction of Asuransi Harta i.e., Asuransi Harta and Pudjiadi Sons go up and down completely randomly.
Pair Corralation between Asuransi Harta and Pudjiadi Sons
Assuming the 90 days trading horizon Asuransi Harta Aman is expected to under-perform the Pudjiadi Sons. But the stock apears to be less risky and, when comparing its historical volatility, Asuransi Harta Aman is 6.8 times less risky than Pudjiadi Sons. The stock trades about -0.16 of its potential returns per unit of risk. The Pudjiadi Sons Tbk is currently generating about 0.35 of returns per unit of risk over similar time horizon. If you would invest 70,500 in Pudjiadi Sons Tbk on September 13, 2024 and sell it today you would earn a total of 75,500 from holding Pudjiadi Sons Tbk or generate 107.09% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Asuransi Harta Aman vs. Pudjiadi Sons Tbk
Performance |
| Timeline |
| Asuransi Harta Aman |
| Pudjiadi Sons Tbk |
Asuransi Harta and Pudjiadi Sons Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Asuransi Harta and Pudjiadi Sons
The main advantage of trading using opposite Asuransi Harta and Pudjiadi Sons positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Asuransi Harta position performs unexpectedly, Pudjiadi Sons 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 Pudjiadi Sons will offset losses from the drop in Pudjiadi Sons' long position.| Asuransi Harta vs. Asuransi Bintang Tbk | Asuransi Harta vs. Asuransi Bina Dana | Asuransi Harta vs. Asuransi Dayin Mitra | Asuransi Harta vs. Asuransi Jasa Tania |
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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 Performance Analysis module to check effects of mean-variance optimization against your current asset allocation.
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