Correlation Between PAM Mineral and Nusa Palapa
Can any of the company-specific risk be diversified away by investing in both PAM Mineral and Nusa Palapa 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 PAM Mineral and Nusa Palapa into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between PAM Mineral Tbk and Nusa Palapa Gemilang, you can compare the effects of market volatilities on PAM Mineral and Nusa Palapa 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 PAM Mineral with a short position of Nusa Palapa. Check out your portfolio center. Please also check ongoing floating volatility patterns of PAM Mineral and Nusa Palapa.
Diversification Opportunities for PAM Mineral and Nusa Palapa
-0.08 | Correlation Coefficient |
Good diversification
The 3 months correlation between PAM and Nusa is -0.08. Overlapping area represents the amount of risk that can be diversified away by holding PAM Mineral Tbk and Nusa Palapa Gemilang in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Nusa Palapa Gemilang and PAM Mineral 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 PAM Mineral Tbk are associated (or correlated) with Nusa Palapa. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Nusa Palapa Gemilang has no effect on the direction of PAM Mineral i.e., PAM Mineral and Nusa Palapa go up and down completely randomly.
Pair Corralation between PAM Mineral and Nusa Palapa
Assuming the 90 days trading horizon PAM Mineral Tbk is expected to generate 0.91 times more return on investment than Nusa Palapa. However, PAM Mineral Tbk is 1.09 times less risky than Nusa Palapa. It trades about 0.11 of its potential returns per unit of risk. Nusa Palapa Gemilang is currently generating about -0.02 per unit of risk. If you would invest 17,929 in PAM Mineral Tbk on August 29, 2024 and sell it today you would earn a total of 12,671 from holding PAM Mineral Tbk or generate 70.67% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
PAM Mineral Tbk vs. Nusa Palapa Gemilang
Performance |
| Timeline |
| PAM Mineral Tbk |
| Nusa Palapa Gemilang |
PAM Mineral and Nusa Palapa Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with PAM Mineral and Nusa Palapa
The main advantage of trading using opposite PAM Mineral and Nusa Palapa positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if PAM Mineral position performs unexpectedly, Nusa Palapa 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 Nusa Palapa will offset losses from the drop in Nusa Palapa's long position.| PAM Mineral vs. Archi Indonesia Tbk | PAM Mineral vs. Bumi Resources Minerals | PAM Mineral vs. Bank Panin Syariah | PAM Mineral vs. Central Omega Resources |
| Nusa Palapa vs. Saraswanti Anugerah Makmur | Nusa Palapa vs. Berkah Beton Sadaya | Nusa Palapa vs. Triputra Agro Persada | Nusa Palapa vs. PT Sunter Lakeside |
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 Bonds Directory module to find actively traded corporate debentures issued by US companies.
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