Correlation Between Prima Andalan and Trimegah Karya
Can any of the company-specific risk be diversified away by investing in both Prima Andalan and Trimegah Karya 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 Trimegah Karya 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 Trimegah Karya Pratama, you can compare the effects of market volatilities on Prima Andalan and Trimegah Karya 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 Trimegah Karya. Check out your portfolio center. Please also check ongoing floating volatility patterns of Prima Andalan and Trimegah Karya.
Diversification Opportunities for Prima Andalan and Trimegah Karya
0.79 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Prima and Trimegah is 0.79. Overlapping area represents the amount of risk that can be diversified away by holding Prima Andalan Mandiri and Trimegah Karya Pratama in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Trimegah Karya Pratama 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 Trimegah Karya. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Trimegah Karya Pratama has no effect on the direction of Prima Andalan i.e., Prima Andalan and Trimegah Karya go up and down completely randomly.
Pair Corralation between Prima Andalan and Trimegah Karya
Assuming the 90 days trading horizon Prima Andalan Mandiri is expected to generate 0.46 times more return on investment than Trimegah Karya. However, Prima Andalan Mandiri is 2.16 times less risky than Trimegah Karya. It trades about 0.1 of its potential returns per unit of risk. Trimegah Karya Pratama is currently generating about -0.17 per unit of risk. If you would invest 505,000 in Prima Andalan Mandiri on November 3, 2024 and sell it today you would earn a total of 10,000 from holding Prima Andalan Mandiri or generate 1.98% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 94.74% |
| Values | Daily Returns |
Prima Andalan Mandiri vs. Trimegah Karya Pratama
Performance |
| Timeline |
| Prima Andalan Mandiri |
| Trimegah Karya Pratama |
Prima Andalan and Trimegah Karya Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Prima Andalan and Trimegah Karya
The main advantage of trading using opposite Prima Andalan and Trimegah Karya positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Prima Andalan position performs unexpectedly, Trimegah Karya 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 Trimegah Karya will offset losses from the drop in Trimegah Karya's long position.| Prima Andalan vs. Bank Artos Indonesia | Prima Andalan vs. GoTo Gojek Tokopedia | Prima Andalan vs. Elang Mahkota Teknologi | Prima Andalan vs. PT Bukalapak |
| Trimegah Karya vs. GoTo Gojek Tokopedia | Trimegah Karya vs. Nusantara Voucher Distribution | Trimegah Karya vs. Global Sukses Solusi | Trimegah Karya vs. PT Kusuma Kemindo |
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 Premium Stories module to follow Macroaxis premium stories from verified contributors across different equity types, categories and coverage scope.
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