Correlation Between Alam Sutera and Pakuwon Jati
Can any of the company-specific risk be diversified away by investing in both Alam Sutera and Pakuwon Jati 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 Alam Sutera and Pakuwon Jati into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Alam Sutera Realty and Pakuwon Jati Tbk, you can compare the effects of market volatilities on Alam Sutera and Pakuwon Jati 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 Alam Sutera with a short position of Pakuwon Jati. Check out your portfolio center. Please also check ongoing floating volatility patterns of Alam Sutera and Pakuwon Jati.
Diversification Opportunities for Alam Sutera and Pakuwon Jati
0.96 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between Alam and Pakuwon is 0.96. Overlapping area represents the amount of risk that can be diversified away by holding Alam Sutera Realty and Pakuwon Jati Tbk in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Pakuwon Jati Tbk and Alam Sutera 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 Alam Sutera Realty are associated (or correlated) with Pakuwon Jati. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Pakuwon Jati Tbk has no effect on the direction of Alam Sutera i.e., Alam Sutera and Pakuwon Jati go up and down completely randomly.
Pair Corralation between Alam Sutera and Pakuwon Jati
Assuming the 90 days trading horizon Alam Sutera Realty is expected to generate 1.42 times more return on investment than Pakuwon Jati. However, Alam Sutera is 1.42 times more volatile than Pakuwon Jati Tbk. It trades about 0.01 of its potential returns per unit of risk. Pakuwon Jati Tbk is currently generating about -0.06 per unit of risk. If you would invest 14,300 in Alam Sutera Realty on November 3, 2024 and sell it today you would earn a total of 0.00 from holding Alam Sutera Realty or generate 0.0% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Alam Sutera Realty vs. Pakuwon Jati Tbk
Performance |
| Timeline |
| Alam Sutera Realty |
| Pakuwon Jati Tbk |
Alam Sutera and Pakuwon Jati Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Alam Sutera and Pakuwon Jati
The main advantage of trading using opposite Alam Sutera and Pakuwon Jati positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Alam Sutera position performs unexpectedly, Pakuwon Jati 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 Pakuwon Jati will offset losses from the drop in Pakuwon Jati's long position.| Alam Sutera vs. Bumi Serpong Damai | Alam Sutera vs. Summarecon Agung Tbk | Alam Sutera vs. Lippo Karawaci Tbk | Alam Sutera vs. Ciputra Development Tbk |
| Pakuwon Jati vs. Bumi Serpong Damai | Pakuwon Jati vs. Ciputra Development Tbk | Pakuwon Jati vs. Summarecon Agung Tbk | Pakuwon Jati vs. Pembangunan Perumahan PT |
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 Efficient Frontier module to plot and analyze your portfolio and positions against risk-return landscape of the market..
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