Correlation Between Perdana Bangun and Tanah Laut
Can any of the company-specific risk be diversified away by investing in both Perdana Bangun and Tanah Laut 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 Perdana Bangun and Tanah Laut into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Perdana Bangun Pusaka and Tanah Laut Tbk, you can compare the effects of market volatilities on Perdana Bangun and Tanah Laut 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 Perdana Bangun with a short position of Tanah Laut. Check out your portfolio center. Please also check ongoing floating volatility patterns of Perdana Bangun and Tanah Laut.
Diversification Opportunities for Perdana Bangun and Tanah Laut
-0.44 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Perdana and Tanah is -0.44. Overlapping area represents the amount of risk that can be diversified away by holding Perdana Bangun Pusaka and Tanah Laut Tbk in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Tanah Laut Tbk and Perdana Bangun 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 Perdana Bangun Pusaka are associated (or correlated) with Tanah Laut. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Tanah Laut Tbk has no effect on the direction of Perdana Bangun i.e., Perdana Bangun and Tanah Laut go up and down completely randomly.
Pair Corralation between Perdana Bangun and Tanah Laut
Assuming the 90 days trading horizon Perdana Bangun Pusaka is expected to generate 6.21 times more return on investment than Tanah Laut. However, Perdana Bangun is 6.21 times more volatile than Tanah Laut Tbk. It trades about 0.4 of its potential returns per unit of risk. Tanah Laut Tbk is currently generating about -0.23 per unit of risk. If you would invest 87,000 in Perdana Bangun Pusaka on August 27, 2024 and sell it today you would earn a total of 117,000 from holding Perdana Bangun Pusaka or generate 134.48% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Perdana Bangun Pusaka vs. Tanah Laut Tbk
Performance |
| Timeline |
| Perdana Bangun Pusaka |
| Tanah Laut Tbk |
Perdana Bangun and Tanah Laut Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Perdana Bangun and Tanah Laut
The main advantage of trading using opposite Perdana Bangun and Tanah Laut positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Perdana Bangun position performs unexpectedly, Tanah Laut 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 Tanah Laut will offset losses from the drop in Tanah Laut's long position.| Perdana Bangun vs. Inter Delta Tbk | Perdana Bangun vs. Jakarta Setiabudi Internasional | Perdana Bangun vs. Modern Internasional Tbk | Perdana Bangun vs. Multi Indocitra Tbk |
| Tanah Laut vs. Inter Delta Tbk | Tanah Laut vs. Humpuss Intermoda Transportasi | Tanah Laut vs. Fortune Indonesia Tbk | Tanah Laut vs. PT MNC Energy |
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 Theme Ratings module to determine theme ratings based on digital equity recommendations. Macroaxis theme ratings are based on combination of fundamental analysis and risk-adjusted market performance.
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