Correlation Between Pacific Strategic and Capital Financial
Can any of the company-specific risk be diversified away by investing in both Pacific Strategic and Capital Financial 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 Capital Financial 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 Capital Financial Indonesia, you can compare the effects of market volatilities on Pacific Strategic and Capital Financial 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 Capital Financial. Check out your portfolio center. Please also check ongoing floating volatility patterns of Pacific Strategic and Capital Financial.
Diversification Opportunities for Pacific Strategic and Capital Financial
0.19 | Correlation Coefficient |
Average diversification
The 3 months correlation between Pacific and Capital is 0.19. Overlapping area represents the amount of risk that can be diversified away by holding Pacific Strategic Financial and Capital Financial Indonesia in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Capital Financial 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 Capital Financial. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Capital Financial has no effect on the direction of Pacific Strategic i.e., Pacific Strategic and Capital Financial go up and down completely randomly.
Pair Corralation between Pacific Strategic and Capital Financial
Assuming the 90 days trading horizon Pacific Strategic Financial is expected to generate 0.52 times more return on investment than Capital Financial. However, Pacific Strategic Financial is 1.93 times less risky than Capital Financial. It trades about -0.03 of its potential returns per unit of risk. Capital Financial Indonesia is currently generating about -0.02 per unit of risk. If you would invest 122,500 in Pacific Strategic Financial on August 29, 2024 and sell it today you would lose (21,500) from holding Pacific Strategic Financial or give up 17.55% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Pacific Strategic Financial vs. Capital Financial Indonesia
Performance |
| Timeline |
| Pacific Strategic |
| Capital Financial |
Pacific Strategic and Capital Financial Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Pacific Strategic and Capital Financial
The main advantage of trading using opposite Pacific Strategic and Capital Financial positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Pacific Strategic position performs unexpectedly, Capital Financial 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 Capital Financial will offset losses from the drop in Capital Financial's long position.| Pacific Strategic vs. Asuransi Harta Aman | Pacific Strategic vs. Asuransi Bintang Tbk | Pacific Strategic vs. Mnc Kapital Indonesia | Pacific Strategic vs. Arthavest Tbk |
| Capital Financial vs. Pacific Strategic Financial | Capital Financial vs. Bk Harda Internasional | Capital Financial vs. Indoritel Makmur Internasional | Capital Financial vs. Bank Sinarmas 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 Portfolio Analyzer module to portfolio analysis module that provides access to portfolio diagnostics and optimization engine.
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