Correlation Between Arwana Citramulia and Provident Agro
Can any of the company-specific risk be diversified away by investing in both Arwana Citramulia and Provident Agro 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 Arwana Citramulia and Provident Agro into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Arwana Citramulia Tbk and Provident Agro Tbk, you can compare the effects of market volatilities on Arwana Citramulia and Provident Agro 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 Arwana Citramulia with a short position of Provident Agro. Check out your portfolio center. Please also check ongoing floating volatility patterns of Arwana Citramulia and Provident Agro.
Diversification Opportunities for Arwana Citramulia and Provident Agro
0.06 | Correlation Coefficient |
Significant diversification
The 3 months correlation between Arwana and Provident is 0.06. Overlapping area represents the amount of risk that can be diversified away by holding Arwana Citramulia Tbk and Provident Agro Tbk in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Provident Agro Tbk and Arwana Citramulia 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 Arwana Citramulia Tbk are associated (or correlated) with Provident Agro. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Provident Agro Tbk has no effect on the direction of Arwana Citramulia i.e., Arwana Citramulia and Provident Agro go up and down completely randomly.
Pair Corralation between Arwana Citramulia and Provident Agro
Assuming the 90 days trading horizon Arwana Citramulia Tbk is expected to under-perform the Provident Agro. But the stock apears to be less risky and, when comparing its historical volatility, Arwana Citramulia Tbk is 1.13 times less risky than Provident Agro. The stock trades about -0.24 of its potential returns per unit of risk. The Provident Agro Tbk is currently generating about 0.0 of returns per unit of risk over similar time horizon. If you would invest 39,400 in Provident Agro Tbk on September 2, 2024 and sell it today you would earn a total of 0.00 from holding Provident Agro Tbk or generate 0.0% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Arwana Citramulia Tbk vs. Provident Agro Tbk
Performance |
| Timeline |
| Arwana Citramulia Tbk |
| Provident Agro Tbk |
Arwana Citramulia and Provident Agro Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Arwana Citramulia and Provident Agro
The main advantage of trading using opposite Arwana Citramulia and Provident Agro positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Arwana Citramulia position performs unexpectedly, Provident Agro 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 Provident Agro will offset losses from the drop in Provident Agro's long position.| Arwana Citramulia vs. Matahari Department Store | Arwana Citramulia vs. Multi Medika Internasional | Arwana Citramulia vs. Visi Media Asia | Arwana Citramulia vs. Bayan Resources Tbk |
| Provident Agro vs. Bank BRISyariah Tbk | Provident Agro vs. Mitra Pinasthika Mustika | Provident Agro vs. Jakarta Int Hotels | Provident Agro vs. Indosterling Technomedia 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 Anywhere module to track or share privately all of your investments from the convenience of any device.
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