Correlation Between Pacific Strategic and Asuransi Dayin
Can any of the company-specific risk be diversified away by investing in both Pacific Strategic and Asuransi Dayin 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 Asuransi Dayin 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 Asuransi Dayin Mitra, you can compare the effects of market volatilities on Pacific Strategic and Asuransi Dayin 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 Asuransi Dayin. Check out your portfolio center. Please also check ongoing floating volatility patterns of Pacific Strategic and Asuransi Dayin.
Diversification Opportunities for Pacific Strategic and Asuransi Dayin
0.28 | Correlation Coefficient |
Modest diversification
The 3 months correlation between Pacific and Asuransi is 0.28. Overlapping area represents the amount of risk that can be diversified away by holding Pacific Strategic Financial and Asuransi Dayin Mitra in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Asuransi Dayin Mitra 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 Asuransi Dayin. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Asuransi Dayin Mitra has no effect on the direction of Pacific Strategic i.e., Pacific Strategic and Asuransi Dayin go up and down completely randomly.
Pair Corralation between Pacific Strategic and Asuransi Dayin
Assuming the 90 days trading horizon Pacific Strategic Financial is expected to under-perform the Asuransi Dayin. But the stock apears to be less risky and, when comparing its historical volatility, Pacific Strategic Financial is 1.39 times less risky than Asuransi Dayin. The stock trades about -0.24 of its potential returns per unit of risk. The Asuransi Dayin Mitra is currently generating about -0.06 of returns per unit of risk over similar time horizon. If you would invest 50,000 in Asuransi Dayin Mitra on August 31, 2024 and sell it today you would lose (800.00) from holding Asuransi Dayin Mitra or give up 1.6% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 95.45% |
| Values | Daily Returns |
Pacific Strategic Financial vs. Asuransi Dayin Mitra
Performance |
| Timeline |
| Pacific Strategic |
| Asuransi Dayin Mitra |
Pacific Strategic and Asuransi Dayin Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Pacific Strategic and Asuransi Dayin
The main advantage of trading using opposite Pacific Strategic and Asuransi Dayin positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Pacific Strategic position performs unexpectedly, Asuransi Dayin 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 Asuransi Dayin will offset losses from the drop in Asuransi Dayin'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 |
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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 Global Correlations module to find global opportunities by holding instruments from different markets.
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