Correlation Between PT Puri and Pudjiadi Sons
Can any of the company-specific risk be diversified away by investing in both PT Puri and Pudjiadi Sons 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 PT Puri and Pudjiadi Sons into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between PT Puri Sentul and Pudjiadi Sons Tbk, you can compare the effects of market volatilities on PT Puri and Pudjiadi Sons 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 PT Puri with a short position of Pudjiadi Sons. Check out your portfolio center. Please also check ongoing floating volatility patterns of PT Puri and Pudjiadi Sons.
Diversification Opportunities for PT Puri and Pudjiadi Sons
-0.79 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between KDTN and Pudjiadi is -0.79. Overlapping area represents the amount of risk that can be diversified away by holding PT Puri Sentul and Pudjiadi Sons Tbk in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Pudjiadi Sons Tbk and PT Puri 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 PT Puri Sentul are associated (or correlated) with Pudjiadi Sons. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Pudjiadi Sons Tbk has no effect on the direction of PT Puri i.e., PT Puri and Pudjiadi Sons go up and down completely randomly.
Pair Corralation between PT Puri and Pudjiadi Sons
Assuming the 90 days trading horizon PT Puri is expected to generate 47.95 times less return on investment than Pudjiadi Sons. But when comparing it to its historical volatility, PT Puri Sentul is 2.72 times less risky than Pudjiadi Sons. It trades about 0.02 of its potential returns per unit of risk. Pudjiadi Sons Tbk is currently generating about 0.41 of returns per unit of risk over similar time horizon. If you would invest 56,500 in Pudjiadi Sons Tbk on September 12, 2024 and sell it today you would earn a total of 89,500 from holding Pudjiadi Sons Tbk or generate 158.41% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
PT Puri Sentul vs. Pudjiadi Sons Tbk
Performance |
| Timeline |
| PT Puri Sentul |
| Pudjiadi Sons Tbk |
PT Puri and Pudjiadi Sons Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with PT Puri and Pudjiadi Sons
The main advantage of trading using opposite PT Puri and Pudjiadi Sons positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if PT Puri position performs unexpectedly, Pudjiadi Sons 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 Pudjiadi Sons will offset losses from the drop in Pudjiadi Sons' long position.| PT Puri vs. PT Primadaya Plastisindo | PT Puri vs. PT Ketrosden Triasmitra | PT Puri vs. Menthobi Karyatama Raya | PT Puri vs. Jayamas Medica Industri |
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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 Price Transformation module to use Price Transformation models to analyze the depth of different equity instruments across global markets.
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