Correlation Between Optima Prima and PT Boston
Can any of the company-specific risk be diversified away by investing in both Optima Prima and PT Boston 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 Boston 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 Boston Furniture, you can compare the effects of market volatilities on Optima Prima and PT Boston 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 Boston. Check out your portfolio center. Please also check ongoing floating volatility patterns of Optima Prima and PT Boston.
Diversification Opportunities for Optima Prima and PT Boston
-0.59 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Optima and SOFA is -0.59. Overlapping area represents the amount of risk that can be diversified away by holding Optima Prima Metal and PT Boston Furniture in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on PT Boston Furniture 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 Boston. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of PT Boston Furniture has no effect on the direction of Optima Prima i.e., Optima Prima and PT Boston go up and down completely randomly.
Pair Corralation between Optima Prima and PT Boston
Assuming the 90 days trading horizon Optima Prima is expected to generate 4.86 times less return on investment than PT Boston. In addition to that, Optima Prima is 1.16 times more volatile than PT Boston Furniture. It trades about 0.02 of its total potential returns per unit of risk. PT Boston Furniture is currently generating about 0.11 per unit of volatility. If you would invest 2,000 in PT Boston Furniture on September 12, 2024 and sell it today you would earn a total of 3,300 from holding PT Boston Furniture or generate 165.0% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Optima Prima Metal vs. PT Boston Furniture
Performance |
| Timeline |
| Optima Prima Metal |
| PT Boston Furniture |
Optima Prima and PT Boston Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Optima Prima and PT Boston
The main advantage of trading using opposite Optima Prima and PT Boston positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Optima Prima position performs unexpectedly, PT Boston 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 Boston will offset losses from the drop in PT Boston'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 Boston vs. Pt Pradiksi Gunatama | PT Boston vs. Sunindo Adipersada Tbk | PT Boston vs. Planet Properindo Jaya | PT Boston vs. Pt Pakuan 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 Portfolio Center module to all portfolio management and optimization tools to improve performance of your portfolios.
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