Correlation Between Pacific Strategic and Asuransi Jasa
Can any of the company-specific risk be diversified away by investing in both Pacific Strategic and Asuransi Jasa 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 Jasa 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 Jasa Tania, you can compare the effects of market volatilities on Pacific Strategic and Asuransi Jasa 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 Jasa. Check out your portfolio center. Please also check ongoing floating volatility patterns of Pacific Strategic and Asuransi Jasa.
Diversification Opportunities for Pacific Strategic and Asuransi Jasa
0.32 | Correlation Coefficient |
Weak diversification
The 3 months correlation between Pacific and Asuransi is 0.32. Overlapping area represents the amount of risk that can be diversified away by holding Pacific Strategic Financial and Asuransi Jasa Tania in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Asuransi Jasa Tania 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 Jasa. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Asuransi Jasa Tania has no effect on the direction of Pacific Strategic i.e., Pacific Strategic and Asuransi Jasa go up and down completely randomly.
Pair Corralation between Pacific Strategic and Asuransi Jasa
Assuming the 90 days trading horizon Pacific Strategic Financial is expected to under-perform the Asuransi Jasa. But the stock apears to be less risky and, when comparing its historical volatility, Pacific Strategic Financial is 1.42 times less risky than Asuransi Jasa. The stock trades about -0.32 of its potential returns per unit of risk. The Asuransi Jasa Tania is currently generating about -0.05 of returns per unit of risk over similar time horizon. If you would invest 11,600 in Asuransi Jasa Tania on August 30, 2024 and sell it today you would lose (200.00) from holding Asuransi Jasa Tania or give up 1.72% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Pacific Strategic Financial vs. Asuransi Jasa Tania
Performance |
| Timeline |
| Pacific Strategic |
| Asuransi Jasa Tania |
Pacific Strategic and Asuransi Jasa Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Pacific Strategic and Asuransi Jasa
The main advantage of trading using opposite Pacific Strategic and Asuransi Jasa positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Pacific Strategic position performs unexpectedly, Asuransi Jasa 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 Jasa will offset losses from the drop in Asuransi Jasa's long position.| Pacific Strategic vs. Bank Cimb Niaga | Pacific Strategic vs. Indosat Tbk | Pacific Strategic vs. Astra Agro Lestari | Pacific Strategic vs. Indocement Tunggal Prakarsa |
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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 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.
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