Correlation Between Cisadane Sawit and Pt Pradiksi
Can any of the company-specific risk be diversified away by investing in both Cisadane Sawit and Pt Pradiksi 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 Cisadane Sawit and Pt Pradiksi into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Cisadane Sawit Raya and Pt Pradiksi Gunatama, you can compare the effects of market volatilities on Cisadane Sawit and Pt Pradiksi 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 Cisadane Sawit with a short position of Pt Pradiksi. Check out your portfolio center. Please also check ongoing floating volatility patterns of Cisadane Sawit and Pt Pradiksi.
Diversification Opportunities for Cisadane Sawit and Pt Pradiksi
0.1 | Correlation Coefficient |
Average diversification
The 3 months correlation between Cisadane and PGUN is 0.1. Overlapping area represents the amount of risk that can be diversified away by holding Cisadane Sawit Raya and Pt Pradiksi Gunatama in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Pt Pradiksi Gunatama and Cisadane Sawit 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 Cisadane Sawit Raya are associated (or correlated) with Pt Pradiksi. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Pt Pradiksi Gunatama has no effect on the direction of Cisadane Sawit i.e., Cisadane Sawit and Pt Pradiksi go up and down completely randomly.
Pair Corralation between Cisadane Sawit and Pt Pradiksi
Assuming the 90 days trading horizon Cisadane Sawit Raya is expected to generate 0.78 times more return on investment than Pt Pradiksi. However, Cisadane Sawit Raya is 1.28 times less risky than Pt Pradiksi. It trades about 0.03 of its potential returns per unit of risk. Pt Pradiksi Gunatama is currently generating about -0.01 per unit of risk. If you would invest 57,566 in Cisadane Sawit Raya on November 4, 2024 and sell it today you would earn a total of 12,434 from holding Cisadane Sawit Raya or generate 21.6% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Cisadane Sawit Raya vs. Pt Pradiksi Gunatama
Performance |
| Timeline |
| Cisadane Sawit Raya |
| Pt Pradiksi Gunatama |
Cisadane Sawit and Pt Pradiksi Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Cisadane Sawit and Pt Pradiksi
The main advantage of trading using opposite Cisadane Sawit and Pt Pradiksi positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Cisadane Sawit position performs unexpectedly, Pt Pradiksi 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 Pt Pradiksi will offset losses from the drop in Pt Pradiksi's long position.| Cisadane Sawit vs. Dharma Satya Nusantara | Cisadane Sawit vs. Austindo Nusantara Jaya | Cisadane Sawit vs. Provident Agro Tbk | Cisadane Sawit vs. Sawit Sumbermas Sarana |
| Pt Pradiksi vs. Triputra Agro Persada | Pt Pradiksi vs. Dayamitra Telekomunikasi PT | Pt Pradiksi vs. RMK Energy PT | Pt Pradiksi vs. Dharma Satya Nusantara |
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 USA ETFs module to find actively traded Exchange Traded Funds (ETF) in USA.
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