Correlation Between Indonesia Prima and Pt Pakuan
Can any of the company-specific risk be diversified away by investing in both Indonesia Prima and Pt Pakuan 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 Pt Pakuan 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 Pt Pakuan Tbk, you can compare the effects of market volatilities on Indonesia Prima and Pt Pakuan 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 Pt Pakuan. Check out your portfolio center. Please also check ongoing floating volatility patterns of Indonesia Prima and Pt Pakuan.
Diversification Opportunities for Indonesia Prima and Pt Pakuan
-0.34 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Indonesia and UANG is -0.34. Overlapping area represents the amount of risk that can be diversified away by holding Indonesia Prima Property and Pt Pakuan Tbk in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Pt Pakuan Tbk 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 Pt Pakuan. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Pt Pakuan Tbk has no effect on the direction of Indonesia Prima i.e., Indonesia Prima and Pt Pakuan go up and down completely randomly.
Pair Corralation between Indonesia Prima and Pt Pakuan
Assuming the 90 days trading horizon Indonesia Prima Property is expected to under-perform the Pt Pakuan. But the stock apears to be less risky and, when comparing its historical volatility, Indonesia Prima Property is 7.8 times less risky than Pt Pakuan. The stock trades about -0.01 of its potential returns per unit of risk. The Pt Pakuan Tbk is currently generating about 0.08 of returns per unit of risk over similar time horizon. If you would invest 51,138 in Pt Pakuan Tbk on September 3, 2024 and sell it today you would earn a total of 22,362 from holding Pt Pakuan Tbk or generate 43.73% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Indonesia Prima Property vs. Pt Pakuan Tbk
Performance |
| Timeline |
| Indonesia Prima Property |
| Pt Pakuan Tbk |
Indonesia Prima and Pt Pakuan Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Indonesia Prima and Pt Pakuan
The main advantage of trading using opposite Indonesia Prima and Pt Pakuan positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Indonesia Prima position performs unexpectedly, Pt Pakuan 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 Pakuan will offset losses from the drop in Pt Pakuan'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 |
| Pt Pakuan vs. Perintis Triniti Properti | Pt Pakuan vs. Satria Mega Kencana | Pt Pakuan vs. Sunindo Adipersada Tbk | Pt Pakuan vs. Jaya Sukses Makmur |
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 Fundamentals Comparison module to compare fundamentals across multiple equities to find investing opportunities.
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