Correlation Between Indonesia Prima and Andalan Sakti
Can any of the company-specific risk be diversified away by investing in both Indonesia Prima and Andalan Sakti 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 Indonesia Prima and Andalan Sakti into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Indonesia Prima Property and Andalan Sakti Primaindo, you can compare the effects of market volatilities on Indonesia Prima and Andalan Sakti 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 Indonesia Prima with a short position of Andalan Sakti. Check out your portfolio center. Please also check ongoing floating volatility patterns of Indonesia Prima and Andalan Sakti.
Diversification Opportunities for Indonesia Prima and Andalan Sakti
0.05 | Correlation Coefficient |
Significant diversification
The 3 months correlation between Indonesia and Andalan is 0.05. Overlapping area represents the amount of risk that can be diversified away by holding Indonesia Prima Property and Andalan Sakti Primaindo in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Andalan Sakti Primaindo and Indonesia Prima 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 Indonesia Prima Property are associated (or correlated) with Andalan Sakti. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Andalan Sakti Primaindo has no effect on the direction of Indonesia Prima i.e., Indonesia Prima and Andalan Sakti go up and down completely randomly.
Pair Corralation between Indonesia Prima and Andalan Sakti
Assuming the 90 days trading horizon Indonesia Prima Property is expected to under-perform the Andalan Sakti. But the stock apears to be less risky and, when comparing its historical volatility, Indonesia Prima Property is 1.35 times less risky than Andalan Sakti. The stock trades about -0.01 of its potential returns per unit of risk. The Andalan Sakti Primaindo is currently generating about 0.03 of returns per unit of risk over similar time horizon. If you would invest 15,700 in Andalan Sakti Primaindo on August 31, 2024 and sell it today you would earn a total of 1,800 from holding Andalan Sakti Primaindo or generate 11.46% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Indonesia Prima Property vs. Andalan Sakti Primaindo
Performance |
| Timeline |
| Indonesia Prima Property |
| Andalan Sakti Primaindo |
Indonesia Prima and Andalan Sakti Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Indonesia Prima and Andalan Sakti
The main advantage of trading using opposite Indonesia Prima and Andalan Sakti positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Indonesia Prima position performs unexpectedly, Andalan Sakti 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 Andalan Sakti will offset losses from the drop in Andalan Sakti's long position.| Indonesia Prima vs. Pikko Land Development | Indonesia Prima vs. Suryamas Dutamakmur Tbk | Indonesia Prima vs. Ristia Bintang Mahkotasejati | Indonesia Prima vs. Pudjiadi Prestige Tbk |
| Andalan Sakti vs. Bumi Benowo Sukses | Andalan Sakti vs. Makmur Berkah Amanda | Andalan Sakti vs. Royalindo Investa Wijaya | Andalan Sakti vs. Cahayaputra Asa Keramik |
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 Positions Ratings module to determine portfolio positions ratings based on digital equity recommendations. Macroaxis instant position ratings are based on combination of fundamental analysis and risk-adjusted market performance.
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