Correlation Between Pacific Strategic and Alumindo Light
Can any of the company-specific risk be diversified away by investing in both Pacific Strategic and Alumindo Light 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 Pacific Strategic and Alumindo Light into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Pacific Strategic Financial and Alumindo Light Metal, you can compare the effects of market volatilities on Pacific Strategic and Alumindo Light 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 Pacific Strategic with a short position of Alumindo Light. Check out your portfolio center. Please also check ongoing floating volatility patterns of Pacific Strategic and Alumindo Light.
Diversification Opportunities for Pacific Strategic and Alumindo Light
0.19 | Correlation Coefficient |
Average diversification
The 3 months correlation between Pacific and Alumindo is 0.19. Overlapping area represents the amount of risk that can be diversified away by holding Pacific Strategic Financial and Alumindo Light Metal in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Alumindo Light Metal and Pacific Strategic 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 Pacific Strategic Financial are associated (or correlated) with Alumindo Light. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Alumindo Light Metal has no effect on the direction of Pacific Strategic i.e., Pacific Strategic and Alumindo Light go up and down completely randomly.
Pair Corralation between Pacific Strategic and Alumindo Light
Assuming the 90 days trading horizon Pacific Strategic Financial is expected to generate 0.4 times more return on investment than Alumindo Light. However, Pacific Strategic Financial is 2.49 times less risky than Alumindo Light. It trades about -0.03 of its potential returns per unit of risk. Alumindo Light Metal is currently generating about -0.1 per unit of risk. If you would invest 118,000 in Pacific Strategic Financial on August 31, 2024 and sell it today you would lose (16,500) from holding Pacific Strategic Financial or give up 13.98% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 99.57% |
| Values | Daily Returns |
Pacific Strategic Financial vs. Alumindo Light Metal
Performance |
| Timeline |
| Pacific Strategic |
| Alumindo Light Metal |
Pacific Strategic and Alumindo Light Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Pacific Strategic and Alumindo Light
The main advantage of trading using opposite Pacific Strategic and Alumindo Light positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Pacific Strategic position performs unexpectedly, Alumindo Light 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 Alumindo Light will offset losses from the drop in Alumindo Light's long position.| Pacific Strategic vs. Bank BRISyariah Tbk | Pacific Strategic vs. Ace Hardware Indonesia | Pacific Strategic vs. Merdeka Copper Gold | Pacific Strategic vs. Mitra Pinasthika Mustika |
| Alumindo Light vs. Asiaplast Industries Tbk | Alumindo Light vs. Argha Karya Prima | Alumindo Light vs. Indal Aluminium Industry | Alumindo Light vs. Alakasa Industrindo Tbk |
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 Instant Ratings module to determine any equity ratings based on digital recommendations. Macroaxis instant equity ratings are based on combination of fundamental analysis and risk-adjusted market performance.
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