Correlation Between Hartadinata Abadi and Putra Rajawali
Can any of the company-specific risk be diversified away by investing in both Hartadinata Abadi and Putra Rajawali 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 Hartadinata Abadi and Putra Rajawali into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Hartadinata Abadi Tbk and Putra Rajawali Kencana, you can compare the effects of market volatilities on Hartadinata Abadi and Putra Rajawali 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 Hartadinata Abadi with a short position of Putra Rajawali. Check out your portfolio center. Please also check ongoing floating volatility patterns of Hartadinata Abadi and Putra Rajawali.
Diversification Opportunities for Hartadinata Abadi and Putra Rajawali
-0.08 | Correlation Coefficient |
Good diversification
The 3 months correlation between Hartadinata and Putra is -0.08. Overlapping area represents the amount of risk that can be diversified away by holding Hartadinata Abadi Tbk and Putra Rajawali Kencana in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Putra Rajawali Kencana and Hartadinata Abadi 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 Hartadinata Abadi Tbk are associated (or correlated) with Putra Rajawali. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Putra Rajawali Kencana has no effect on the direction of Hartadinata Abadi i.e., Hartadinata Abadi and Putra Rajawali go up and down completely randomly.
Pair Corralation between Hartadinata Abadi and Putra Rajawali
Assuming the 90 days trading horizon Hartadinata Abadi Tbk is expected to under-perform the Putra Rajawali. But the stock apears to be less risky and, when comparing its historical volatility, Hartadinata Abadi Tbk is 2.81 times less risky than Putra Rajawali. The stock trades about -0.55 of its potential returns per unit of risk. The Putra Rajawali Kencana is currently generating about -0.15 of returns per unit of risk over similar time horizon. If you would invest 1,600 in Putra Rajawali Kencana on September 1, 2024 and sell it today you would lose (300.00) from holding Putra Rajawali Kencana or give up 18.75% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 95.45% |
| Values | Daily Returns |
Hartadinata Abadi Tbk vs. Putra Rajawali Kencana
Performance |
| Timeline |
| Hartadinata Abadi Tbk |
| Putra Rajawali Kencana |
Hartadinata Abadi and Putra Rajawali Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Hartadinata Abadi and Putra Rajawali
The main advantage of trading using opposite Hartadinata Abadi and Putra Rajawali positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Hartadinata Abadi position performs unexpectedly, Putra Rajawali 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 Rajawali will offset losses from the drop in Putra Rajawali's long position.| Hartadinata Abadi vs. Steel Pipe Industry | Hartadinata Abadi vs. Puradelta Lestari PT | Hartadinata Abadi vs. Jasa Armada Indonesia | Hartadinata Abadi vs. Integra Indocabinet Tbk |
| Putra Rajawali vs. Guna Timur Raya | Putra Rajawali vs. Sinergi Inti Plastindo | Putra Rajawali vs. Hartadinata Abadi Tbk | Putra Rajawali vs. Weha Transportasi Indonesia |
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 Equity Forecasting module to use basic forecasting models to generate price predictions and determine price momentum.
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