Correlation Between Perdana Bangun and Tembaga Mulia
Can any of the company-specific risk be diversified away by investing in both Perdana Bangun and Tembaga Mulia 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 Tembaga Mulia 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 Tembaga Mulia Semanan, you can compare the effects of market volatilities on Perdana Bangun and Tembaga Mulia 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 Tembaga Mulia. Check out your portfolio center. Please also check ongoing floating volatility patterns of Perdana Bangun and Tembaga Mulia.
Diversification Opportunities for Perdana Bangun and Tembaga Mulia
0.81 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Perdana and Tembaga is 0.81. Overlapping area represents the amount of risk that can be diversified away by holding Perdana Bangun Pusaka and Tembaga Mulia Semanan in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Tembaga Mulia Semanan 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 Tembaga Mulia. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Tembaga Mulia Semanan has no effect on the direction of Perdana Bangun i.e., Perdana Bangun and Tembaga Mulia go up and down completely randomly.
Pair Corralation between Perdana Bangun and Tembaga Mulia
Assuming the 90 days trading horizon Perdana Bangun Pusaka is expected to generate 7.04 times more return on investment than Tembaga Mulia. However, Perdana Bangun is 7.04 times more volatile than Tembaga Mulia Semanan. It trades about 0.18 of its potential returns per unit of risk. Tembaga Mulia Semanan is currently generating about -0.08 per unit of risk. If you would invest 108,500 in Perdana Bangun Pusaka on September 1, 2024 and sell it today you would earn a total of 41,500 from holding Perdana Bangun Pusaka or generate 38.25% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Perdana Bangun Pusaka vs. Tembaga Mulia Semanan
Performance |
| Timeline |
| Perdana Bangun Pusaka |
| Tembaga Mulia Semanan |
Perdana Bangun and Tembaga Mulia Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Perdana Bangun and Tembaga Mulia
The main advantage of trading using opposite Perdana Bangun and Tembaga Mulia positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Perdana Bangun position performs unexpectedly, Tembaga Mulia 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 Tembaga Mulia will offset losses from the drop in Tembaga Mulia'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 |
| Tembaga Mulia vs. Matahari Department Store | Tembaga Mulia vs. Multi Medika Internasional | Tembaga Mulia vs. Visi Media Asia | Tembaga Mulia 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 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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