Correlation Between Pelayaran Nelly and PAM Mineral
Can any of the company-specific risk be diversified away by investing in both Pelayaran Nelly and PAM Mineral 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 Pelayaran Nelly and PAM Mineral into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Pelayaran Nelly Dwi and PAM Mineral Tbk, you can compare the effects of market volatilities on Pelayaran Nelly and PAM Mineral 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 Pelayaran Nelly with a short position of PAM Mineral. Check out your portfolio center. Please also check ongoing floating volatility patterns of Pelayaran Nelly and PAM Mineral.
Diversification Opportunities for Pelayaran Nelly and PAM Mineral
0.03 | Correlation Coefficient |
Significant diversification
The 3 months correlation between Pelayaran and PAM is 0.03. Overlapping area represents the amount of risk that can be diversified away by holding Pelayaran Nelly Dwi and PAM Mineral Tbk in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on PAM Mineral Tbk and Pelayaran Nelly 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 Pelayaran Nelly Dwi are associated (or correlated) with PAM Mineral. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of PAM Mineral Tbk has no effect on the direction of Pelayaran Nelly i.e., Pelayaran Nelly and PAM Mineral go up and down completely randomly.
Pair Corralation between Pelayaran Nelly and PAM Mineral
Assuming the 90 days trading horizon Pelayaran Nelly is expected to generate 2.19 times less return on investment than PAM Mineral. But when comparing it to its historical volatility, Pelayaran Nelly Dwi is 2.0 times less risky than PAM Mineral. It trades about 0.06 of its potential returns per unit of risk. PAM Mineral Tbk is currently generating about 0.06 of returns per unit of risk over similar time horizon. If you would invest 11,432 in PAM Mineral Tbk on August 28, 2024 and sell it today you would earn a total of 18,968 from holding PAM Mineral Tbk or generate 165.92% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Pelayaran Nelly Dwi vs. PAM Mineral Tbk
Performance |
| Timeline |
| Pelayaran Nelly Dwi |
| PAM Mineral Tbk |
Pelayaran Nelly and PAM Mineral Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Pelayaran Nelly and PAM Mineral
The main advantage of trading using opposite Pelayaran Nelly and PAM Mineral positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Pelayaran Nelly position performs unexpectedly, PAM Mineral 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 PAM Mineral will offset losses from the drop in PAM Mineral's long position.| Pelayaran Nelly vs. Trans Power Marine | Pelayaran Nelly vs. Pelita Samudera Shipping | Pelayaran Nelly vs. Samudera Indonesia Tbk | Pelayaran Nelly vs. Mitrabahtera Segara Sejati |
| PAM Mineral vs. Merdeka Copper Gold | PAM Mineral vs. Aneka Tambang Persero | PAM Mineral vs. Bumi Resources Minerals | PAM Mineral vs. Timah Persero 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 Portfolio Analyzer module to portfolio analysis module that provides access to portfolio diagnostics and optimization engine.
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