Correlation Between Optima Prima and Shield On
Can any of the company-specific risk be diversified away by investing in both Optima Prima and Shield On 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 Shield On 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 Shield On Service, you can compare the effects of market volatilities on Optima Prima and Shield On 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 Shield On. Check out your portfolio center. Please also check ongoing floating volatility patterns of Optima Prima and Shield On.
Diversification Opportunities for Optima Prima and Shield On
-0.61 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Optima and Shield is -0.61. Overlapping area represents the amount of risk that can be diversified away by holding Optima Prima Metal and Shield On Service in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Shield On Service 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 Shield On. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Shield On Service has no effect on the direction of Optima Prima i.e., Optima Prima and Shield On go up and down completely randomly.
Pair Corralation between Optima Prima and Shield On
Assuming the 90 days trading horizon Optima Prima is expected to generate 2.96 times less return on investment than Shield On. But when comparing it to its historical volatility, Optima Prima Metal is 1.09 times less risky than Shield On. It trades about 0.01 of its potential returns per unit of risk. Shield On Service is currently generating about 0.03 of returns per unit of risk over similar time horizon. If you would invest 53,721 in Shield On Service on September 2, 2024 and sell it today you would earn a total of 5,279 from holding Shield On Service or generate 9.83% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Optima Prima Metal vs. Shield On Service
Performance |
| Timeline |
| Optima Prima Metal |
| Shield On Service |
Optima Prima and Shield On Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Optima Prima and Shield On
The main advantage of trading using opposite Optima Prima and Shield On positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Optima Prima position performs unexpectedly, Shield On 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 Shield On will offset losses from the drop in Shield On's long position.| Optima Prima vs. Emdeki Utama Tbk | Optima Prima vs. Nusantara Almazia | Optima Prima vs. Sentral Mitra Informatika | Optima Prima vs. Darmi Bersaudara Tbk |
| Shield On vs. PT Surya Pertiwi | Shield On vs. Satria Mega Kencana | Shield On vs. Multifiling Mitra Indonesia | Shield On vs. Royal Prima PT |
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 Instant Ratings module to determine any equity ratings based on digital recommendations. Macroaxis instant equity ratings are based on combination of fundamental analysis and risk-adjusted market performance.
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