Correlation Between Industri Dan and Putra Mandiri
Can any of the company-specific risk be diversified away by investing in both Industri Dan and Putra Mandiri 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 Industri Dan and Putra Mandiri into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Industri Dan Perdagangan and Putra Mandiri Jembar, you can compare the effects of market volatilities on Industri Dan and Putra Mandiri 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 Industri Dan with a short position of Putra Mandiri. Check out your portfolio center. Please also check ongoing floating volatility patterns of Industri Dan and Putra Mandiri.
Diversification Opportunities for Industri Dan and Putra Mandiri
-0.25 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Industri and Putra is -0.25. Overlapping area represents the amount of risk that can be diversified away by holding Industri Dan Perdagangan and Putra Mandiri Jembar in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Putra Mandiri Jembar and Industri Dan 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 Industri Dan Perdagangan are associated (or correlated) with Putra Mandiri. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Putra Mandiri Jembar has no effect on the direction of Industri Dan i.e., Industri Dan and Putra Mandiri go up and down completely randomly.
Pair Corralation between Industri Dan and Putra Mandiri
Assuming the 90 days trading horizon Industri Dan Perdagangan is expected to generate 0.44 times more return on investment than Putra Mandiri. However, Industri Dan Perdagangan is 2.26 times less risky than Putra Mandiri. It trades about 0.04 of its potential returns per unit of risk. Putra Mandiri Jembar is currently generating about -0.14 per unit of risk. If you would invest 8,200 in Industri Dan Perdagangan on September 1, 2024 and sell it today you would earn a total of 100.00 from holding Industri Dan Perdagangan or generate 1.22% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 95.45% |
| Values | Daily Returns |
Industri Dan Perdagangan vs. Putra Mandiri Jembar
Performance |
| Timeline |
| Industri Dan Perdagangan |
| Putra Mandiri Jembar |
Industri Dan and Putra Mandiri Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Industri Dan and Putra Mandiri
The main advantage of trading using opposite Industri Dan and Putra Mandiri positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Industri Dan position performs unexpectedly, Putra Mandiri 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 Putra Mandiri will offset losses from the drop in Putra Mandiri's long position.| Industri Dan vs. Japfa Comfeed Indonesia | Industri Dan vs. Charoen Pokphand Indonesia | Industri Dan vs. Erajaya Swasembada Tbk | Industri Dan vs. Indofood Cbp Sukses |
| Putra Mandiri vs. Adaro Minerals Indonesia | Putra Mandiri vs. Dharma Polimetal Tbk | Putra Mandiri vs. Wir Asia Tbk | Putra Mandiri vs. Adi Sarana Armada |
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 Optimization module to compute new portfolio that will generate highest expected return given your specified tolerance for risk.
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