Correlation Between Indonesia Pondasi and PP Presisi
Can any of the company-specific risk be diversified away by investing in both Indonesia Pondasi and PP Presisi 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 PP Presisi 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 PP Presisi Tbk, you can compare the effects of market volatilities on Indonesia Pondasi and PP Presisi 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 PP Presisi. Check out your portfolio center. Please also check ongoing floating volatility patterns of Indonesia Pondasi and PP Presisi.
Diversification Opportunities for Indonesia Pondasi and PP Presisi
-0.21 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Indonesia and PPRE is -0.21. Overlapping area represents the amount of risk that can be diversified away by holding Indonesia Pondasi Raya and PP Presisi Tbk in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on PP Presisi Tbk 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 PP Presisi. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of PP Presisi Tbk has no effect on the direction of Indonesia Pondasi i.e., Indonesia Pondasi and PP Presisi go up and down completely randomly.
Pair Corralation between Indonesia Pondasi and PP Presisi
Assuming the 90 days trading horizon Indonesia Pondasi Raya is expected to generate 0.91 times more return on investment than PP Presisi. However, Indonesia Pondasi Raya is 1.1 times less risky than PP Presisi. It trades about -0.15 of its potential returns per unit of risk. PP Presisi Tbk is currently generating about -0.33 per unit of risk. If you would invest 19,100 in Indonesia Pondasi Raya on September 2, 2024 and sell it today you would lose (1,600) from holding Indonesia Pondasi Raya or give up 8.38% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Indonesia Pondasi Raya vs. PP Presisi Tbk
Performance |
| Timeline |
| Indonesia Pondasi Raya |
| PP Presisi Tbk |
Indonesia Pondasi and PP Presisi Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Indonesia Pondasi and PP Presisi
The main advantage of trading using opposite Indonesia Pondasi and PP Presisi positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Indonesia Pondasi position performs unexpectedly, PP Presisi 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 PP Presisi will offset losses from the drop in PP Presisi's long position.| Indonesia Pondasi vs. Matahari Department Store | Indonesia Pondasi vs. Multi Medika Internasional | Indonesia Pondasi vs. Visi Media Asia | Indonesia Pondasi vs. Bayan Resources Tbk |
| PP Presisi vs. Matahari Department Store | PP Presisi vs. Multi Medika Internasional | PP Presisi vs. Visi Media Asia | PP Presisi vs. Bayan Resources 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 Bonds Directory module to find actively traded corporate debentures issued by US companies.
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