Correlation Between Puradelta Lestari and Metropolitan Land
Can any of the company-specific risk be diversified away by investing in both Puradelta Lestari and Metropolitan Land 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 Puradelta Lestari and Metropolitan Land into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Puradelta Lestari PT and Metropolitan Land Tbk, you can compare the effects of market volatilities on Puradelta Lestari and Metropolitan Land 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 Puradelta Lestari with a short position of Metropolitan Land. Check out your portfolio center. Please also check ongoing floating volatility patterns of Puradelta Lestari and Metropolitan Land.
Diversification Opportunities for Puradelta Lestari and Metropolitan Land
0.5 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Puradelta and Metropolitan is 0.5. Overlapping area represents the amount of risk that can be diversified away by holding Puradelta Lestari PT and Metropolitan Land Tbk in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Metropolitan Land Tbk and Puradelta Lestari 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 Puradelta Lestari PT are associated (or correlated) with Metropolitan Land. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Metropolitan Land Tbk has no effect on the direction of Puradelta Lestari i.e., Puradelta Lestari and Metropolitan Land go up and down completely randomly.
Pair Corralation between Puradelta Lestari and Metropolitan Land
Assuming the 90 days trading horizon Puradelta Lestari PT is expected to generate 0.31 times more return on investment than Metropolitan Land. However, Puradelta Lestari PT is 3.18 times less risky than Metropolitan Land. It trades about -0.28 of its potential returns per unit of risk. Metropolitan Land Tbk is currently generating about -0.21 per unit of risk. If you would invest 16,500 in Puradelta Lestari PT on September 1, 2024 and sell it today you would lose (500.00) from holding Puradelta Lestari PT or give up 3.03% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 95.45% |
| Values | Daily Returns |
Puradelta Lestari PT vs. Metropolitan Land Tbk
Performance |
| Timeline |
| Puradelta Lestari |
| Metropolitan Land Tbk |
Puradelta Lestari and Metropolitan Land Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Puradelta Lestari and Metropolitan Land
The main advantage of trading using opposite Puradelta Lestari and Metropolitan Land positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Puradelta Lestari position performs unexpectedly, Metropolitan Land 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 Metropolitan Land will offset losses from the drop in Metropolitan Land's long position.| Puradelta Lestari vs. Pakuwon Jati Tbk | Puradelta Lestari vs. Sido Muncul PT | Puradelta Lestari vs. Bekasi Fajar Industrial | Puradelta Lestari vs. Bank Pembangunan Timur |
| Metropolitan Land vs. Jaya Real Property | Metropolitan Land vs. Intiland Development Tbk | Metropolitan Land vs. Modernland Realty Ltd | Metropolitan Land vs. Lippo Cikarang 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 Volatility module to check portfolio volatility and analyze historical return density to properly model market risk.
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