Correlation Between Sariguna Primatirta and Puradelta Lestari
Can any of the company-specific risk be diversified away by investing in both Sariguna Primatirta and Puradelta Lestari 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 Sariguna Primatirta and Puradelta Lestari into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Sariguna Primatirta PT and Puradelta Lestari PT, you can compare the effects of market volatilities on Sariguna Primatirta and Puradelta Lestari 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 Sariguna Primatirta with a short position of Puradelta Lestari. Check out your portfolio center. Please also check ongoing floating volatility patterns of Sariguna Primatirta and Puradelta Lestari.
Diversification Opportunities for Sariguna Primatirta and Puradelta Lestari
0.04 | Correlation Coefficient |
Significant diversification
The 3 months correlation between Sariguna and Puradelta is 0.04. Overlapping area represents the amount of risk that can be diversified away by holding Sariguna Primatirta PT and Puradelta Lestari PT in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Puradelta Lestari and Sariguna Primatirta 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 Sariguna Primatirta PT are associated (or correlated) with Puradelta Lestari. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Puradelta Lestari has no effect on the direction of Sariguna Primatirta i.e., Sariguna Primatirta and Puradelta Lestari go up and down completely randomly.
Pair Corralation between Sariguna Primatirta and Puradelta Lestari
Assuming the 90 days trading horizon Sariguna Primatirta PT is expected to generate 2.48 times more return on investment than Puradelta Lestari. However, Sariguna Primatirta is 2.48 times more volatile than Puradelta Lestari PT. It trades about 0.11 of its potential returns per unit of risk. Puradelta Lestari PT is currently generating about -0.01 per unit of risk. If you would invest 70,721 in Sariguna Primatirta PT on August 25, 2024 and sell it today you would earn a total of 52,779 from holding Sariguna Primatirta PT or generate 74.63% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Sariguna Primatirta PT vs. Puradelta Lestari PT
Performance |
| Timeline |
| Sariguna Primatirta |
| Puradelta Lestari |
Sariguna Primatirta and Puradelta Lestari Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Sariguna Primatirta and Puradelta Lestari
The main advantage of trading using opposite Sariguna Primatirta and Puradelta Lestari positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Sariguna Primatirta position performs unexpectedly, Puradelta Lestari 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 Puradelta Lestari will offset losses from the drop in Puradelta Lestari's long position.| Sariguna Primatirta vs. Charoen Pokphand Indonesia | Sariguna Primatirta vs. Kalbe Farma Tbk | Sariguna Primatirta vs. Indofood Cbp Sukses | Sariguna Primatirta vs. Akr Corporindo Tbk |
| Puradelta Lestari vs. Pakuwon Jati Tbk | Puradelta Lestari vs. Sido Muncul PT | Puradelta Lestari vs. Bekasi Fajar Industrial | Puradelta Lestari vs. Bank Pembangunan Timur |
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 Idea Breakdown module to analyze constituents of all Macroaxis ideas. Macroaxis investment ideas are predefined, sector-focused investing themes.
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