Correlation Between PAM Mineral and PT Sari
Can any of the company-specific risk be diversified away by investing in both PAM Mineral and PT Sari 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 PT Sari 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 PT Sari Kreasi, you can compare the effects of market volatilities on PAM Mineral and PT Sari 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 PT Sari. Check out your portfolio center. Please also check ongoing floating volatility patterns of PAM Mineral and PT Sari.
Diversification Opportunities for PAM Mineral and PT Sari
-0.24 | Correlation Coefficient |
Very good diversification
The 3 months correlation between PAM and RAFI is -0.24. Overlapping area represents the amount of risk that can be diversified away by holding PAM Mineral Tbk and PT Sari Kreasi in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on PT Sari Kreasi 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 PT Sari. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of PT Sari Kreasi has no effect on the direction of PAM Mineral i.e., PAM Mineral and PT Sari go up and down completely randomly.
Pair Corralation between PAM Mineral and PT Sari
Assuming the 90 days trading horizon PAM Mineral is expected to generate 1.62 times less return on investment than PT Sari. But when comparing it to its historical volatility, PAM Mineral Tbk is 2.12 times less risky than PT Sari. It trades about 0.18 of its potential returns per unit of risk. PT Sari Kreasi is currently generating about 0.14 of returns per unit of risk over similar time horizon. If you would invest 2,600 in PT Sari Kreasi on August 30, 2024 and sell it today you would earn a total of 400.00 from holding PT Sari Kreasi or generate 15.38% 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. PT Sari Kreasi
Performance |
| Timeline |
| PAM Mineral Tbk |
| PT Sari Kreasi |
PAM Mineral and PT Sari Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with PAM Mineral and PT Sari
The main advantage of trading using opposite PAM Mineral and PT Sari positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if PAM Mineral position performs unexpectedly, PT Sari 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 PT Sari will offset losses from the drop in PT Sari's long position.| PAM Mineral vs. Merdeka Copper Gold | PAM Mineral vs. Aneka Tambang Persero | PAM Mineral vs. Bumi Resources Minerals | PAM Mineral vs. Cita Mineral Investindo |
| PT Sari vs. PT Dewi Shri | PT Sari vs. Bangun Karya Perkasa | PT Sari vs. Gaya Abadi Sempurna | PT Sari vs. Habco Trans Maritima |
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 Idea Optimizer module to use advanced portfolio builder with pre-computed micro ideas to build optimal portfolio .
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