Correlation Between Indonesia Pondasi and Paramita Bangun
Can any of the company-specific risk be diversified away by investing in both Indonesia Pondasi and Paramita Bangun 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 Indonesia Pondasi and Paramita Bangun into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Indonesia Pondasi Raya and Paramita Bangun Sarana, you can compare the effects of market volatilities on Indonesia Pondasi and Paramita Bangun 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 Indonesia Pondasi with a short position of Paramita Bangun. Check out your portfolio center. Please also check ongoing floating volatility patterns of Indonesia Pondasi and Paramita Bangun.
Diversification Opportunities for Indonesia Pondasi and Paramita Bangun
-0.13 | Correlation Coefficient |
Good diversification
The 3 months correlation between Indonesia and Paramita is -0.13. Overlapping area represents the amount of risk that can be diversified away by holding Indonesia Pondasi Raya and Paramita Bangun Sarana in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Paramita Bangun Sarana and Indonesia Pondasi 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 Indonesia Pondasi Raya are associated (or correlated) with Paramita Bangun. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Paramita Bangun Sarana has no effect on the direction of Indonesia Pondasi i.e., Indonesia Pondasi and Paramita Bangun go up and down completely randomly.
Pair Corralation between Indonesia Pondasi and Paramita Bangun
Assuming the 90 days trading horizon Indonesia Pondasi Raya is expected to under-perform the Paramita Bangun. In addition to that, Indonesia Pondasi is 1.43 times more volatile than Paramita Bangun Sarana. It trades about -0.05 of its total potential returns per unit of risk. Paramita Bangun Sarana is currently generating about 0.07 per unit of volatility. If you would invest 33,800 in Paramita Bangun Sarana on November 29, 2024 and sell it today you would earn a total of 2,600 from holding Paramita Bangun Sarana or generate 7.69% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 98.28% |
| Values | Daily Returns |
Indonesia Pondasi Raya vs. Paramita Bangun Sarana
Performance |
| Timeline |
| Indonesia Pondasi Raya |
| Paramita Bangun Sarana |
Indonesia Pondasi and Paramita Bangun Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Indonesia Pondasi and Paramita Bangun
The main advantage of trading using opposite Indonesia Pondasi and Paramita Bangun positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Indonesia Pondasi position performs unexpectedly, Paramita Bangun 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 Paramita Bangun will offset losses from the drop in Paramita Bangun's long position.| Indonesia Pondasi vs. Acset Indonusa Tbk | Indonesia Pondasi vs. Jaya Konstruksi Manggala | Indonesia Pondasi vs. Nusa Raya Cipta | Indonesia Pondasi vs. Paramita Bangun Sarana |
| Paramita Bangun vs. Bisi International Tbk | Paramita Bangun vs. Sampoerna Agro Tbk | Paramita Bangun vs. Akr Corporindo Tbk | Paramita Bangun vs. Solusi Bangun 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 Idea Breakdown module to analyze constituents of all Macroaxis ideas. Macroaxis investment ideas are predefined, sector-focused investing themes.
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