Correlation Between Prima Andalan and Ace Oldfields
Can any of the company-specific risk be diversified away by investing in both Prima Andalan and Ace Oldfields 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 Prima Andalan and Ace Oldfields into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Prima Andalan Mandiri and Ace Oldfields PT, you can compare the effects of market volatilities on Prima Andalan and Ace Oldfields 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 Prima Andalan with a short position of Ace Oldfields. Check out your portfolio center. Please also check ongoing floating volatility patterns of Prima Andalan and Ace Oldfields.
Diversification Opportunities for Prima Andalan and Ace Oldfields
0.46 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Prima and Ace is 0.46. Overlapping area represents the amount of risk that can be diversified away by holding Prima Andalan Mandiri and Ace Oldfields PT in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Ace Oldfields PT and Prima Andalan 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 Prima Andalan Mandiri are associated (or correlated) with Ace Oldfields. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Ace Oldfields PT has no effect on the direction of Prima Andalan i.e., Prima Andalan and Ace Oldfields go up and down completely randomly.
Pair Corralation between Prima Andalan and Ace Oldfields
Assuming the 90 days trading horizon Prima Andalan Mandiri is expected to generate 0.38 times more return on investment than Ace Oldfields. However, Prima Andalan Mandiri is 2.65 times less risky than Ace Oldfields. It trades about -0.21 of its potential returns per unit of risk. Ace Oldfields PT is currently generating about -0.18 per unit of risk. If you would invest 550,000 in Prima Andalan Mandiri on August 30, 2024 and sell it today you would lose (17,500) from holding Prima Andalan Mandiri or give up 3.18% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Prima Andalan Mandiri vs. Ace Oldfields PT
Performance |
| Timeline |
| Prima Andalan Mandiri |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
| Ace Oldfields PT |
Prima Andalan and Ace Oldfields Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Prima Andalan and Ace Oldfields
The main advantage of trading using opposite Prima Andalan and Ace Oldfields positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Prima Andalan position performs unexpectedly, Ace Oldfields 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 Ace Oldfields will offset losses from the drop in Ace Oldfields' long position.| Prima Andalan vs. Baramulti Suksessarana Tbk | Prima Andalan vs. Mitrabara Adiperdana PT | Prima Andalan vs. Adaro Minerals Indonesia | Prima Andalan vs. RMK Energy PT |
| Ace Oldfields vs. Ladangbaja Murni PT | Ace Oldfields vs. PT Hasnur Internasional | Ace Oldfields vs. Geoprima Solusi Tbk | Ace Oldfields vs. Indo Oil Perkasa |
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 Companies Directory module to evaluate performance of over 100,000 Stocks, Funds, and ETFs against different fundamentals.
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