Correlation Between Optima Prima and PT UBC
Can any of the company-specific risk be diversified away by investing in both Optima Prima and PT UBC 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 Optima Prima and PT UBC into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Optima Prima Metal and PT UBC Medical, you can compare the effects of market volatilities on Optima Prima and PT UBC 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 Optima Prima with a short position of PT UBC. Check out your portfolio center. Please also check ongoing floating volatility patterns of Optima Prima and PT UBC.
Diversification Opportunities for Optima Prima and PT UBC
0.75 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Optima and LABS is 0.75. Overlapping area represents the amount of risk that can be diversified away by holding Optima Prima Metal and PT UBC Medical in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on PT UBC Medical and Optima 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 Optima Prima Metal are associated (or correlated) with PT UBC. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of PT UBC Medical has no effect on the direction of Optima Prima i.e., Optima Prima and PT UBC go up and down completely randomly.
Pair Corralation between Optima Prima and PT UBC
Assuming the 90 days trading horizon Optima Prima Metal is expected to generate 0.89 times more return on investment than PT UBC. However, Optima Prima Metal is 1.12 times less risky than PT UBC. It trades about 0.01 of its potential returns per unit of risk. PT UBC Medical is currently generating about 0.01 per unit of risk. If you would invest 5,300 in Optima Prima Metal on November 5, 2024 and sell it today you would lose (300.00) from holding Optima Prima Metal or give up 5.66% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 61.14% |
| Values | Daily Returns |
Optima Prima Metal vs. PT UBC Medical
Performance |
| Timeline |
| Optima Prima Metal |
| PT UBC Medical |
Optima Prima and PT UBC Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Optima Prima and PT UBC
The main advantage of trading using opposite Optima Prima and PT UBC positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Optima Prima position performs unexpectedly, PT UBC 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 UBC will offset losses from the drop in PT UBC's long position.| Optima Prima vs. Gunung Raja Paksi | Optima Prima vs. Emdeki Utama Tbk | Optima Prima vs. Nusantara Almazia | Optima Prima vs. Sentral Mitra Informatika |
| PT UBC vs. Indo Acidatama Tbk | PT UBC vs. PT Bank Bisnis | PT UBC vs. Pertamina Geothermal Energy | PT UBC vs. Smartfren Telecom 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 ETFs module to find actively traded Exchange Traded Funds (ETF) from around the world.
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