Correlation Between PAM Mineral and PT Sunter
Can any of the company-specific risk be diversified away by investing in both PAM Mineral and PT Sunter 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 Sunter 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 Sunter Lakeside, you can compare the effects of market volatilities on PAM Mineral and PT Sunter 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 Sunter. Check out your portfolio center. Please also check ongoing floating volatility patterns of PAM Mineral and PT Sunter.
Diversification Opportunities for PAM Mineral and PT Sunter
-0.31 | Correlation Coefficient |
Very good diversification
The 3 months correlation between PAM and SNLK is -0.31. Overlapping area represents the amount of risk that can be diversified away by holding PAM Mineral Tbk and PT Sunter Lakeside in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on PT Sunter Lakeside 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 Sunter. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of PT Sunter Lakeside has no effect on the direction of PAM Mineral i.e., PAM Mineral and PT Sunter go up and down completely randomly.
Pair Corralation between PAM Mineral and PT Sunter
Assuming the 90 days trading horizon PAM Mineral Tbk is expected to generate 1.24 times more return on investment than PT Sunter. However, PAM Mineral is 1.24 times more volatile than PT Sunter Lakeside. It trades about 0.02 of its potential returns per unit of risk. PT Sunter Lakeside is currently generating about 0.0 per unit of risk. If you would invest 28,439 in PAM Mineral Tbk on September 1, 2024 and sell it today you would earn a total of 1,161 from holding PAM Mineral Tbk or generate 4.08% 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 Sunter Lakeside
Performance |
| Timeline |
| PAM Mineral Tbk |
| PT Sunter Lakeside |
PAM Mineral and PT Sunter Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with PAM Mineral and PT Sunter
The main advantage of trading using opposite PAM Mineral and PT Sunter positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if PAM Mineral position performs unexpectedly, PT Sunter 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 Sunter will offset losses from the drop in PT Sunter'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 |
| PT Sunter vs. Gaya Abadi Sempurna | PT Sunter vs. Damai Sejahtera Abadi | PT Sunter vs. Red Planet Indonesia | PT Sunter vs. PAM Mineral 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 Insider Screener module to find insiders across different sectors to evaluate their impact on performance.
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