Correlation Between Provident Agro and Putra Mandiri
Can any of the company-specific risk be diversified away by investing in both Provident Agro and Putra Mandiri 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 Provident Agro and Putra Mandiri into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Provident Agro Tbk and Putra Mandiri Jembar, you can compare the effects of market volatilities on Provident Agro and Putra Mandiri 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 Provident Agro with a short position of Putra Mandiri. Check out your portfolio center. Please also check ongoing floating volatility patterns of Provident Agro and Putra Mandiri.
Diversification Opportunities for Provident Agro and Putra Mandiri
0.26 | Correlation Coefficient |
Modest diversification
The 3 months correlation between Provident and Putra is 0.26. Overlapping area represents the amount of risk that can be diversified away by holding Provident Agro Tbk and Putra Mandiri Jembar in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Putra Mandiri Jembar and Provident Agro 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 Provident Agro Tbk are associated (or correlated) with Putra Mandiri. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Putra Mandiri Jembar has no effect on the direction of Provident Agro i.e., Provident Agro and Putra Mandiri go up and down completely randomly.
Pair Corralation between Provident Agro and Putra Mandiri
Assuming the 90 days trading horizon Provident Agro Tbk is expected to under-perform the Putra Mandiri. But the stock apears to be less risky and, when comparing its historical volatility, Provident Agro Tbk is 1.04 times less risky than Putra Mandiri. The stock trades about -0.16 of its potential returns per unit of risk. The Putra Mandiri Jembar is currently generating about 0.01 of returns per unit of risk over similar time horizon. If you would invest 12,000 in Putra Mandiri Jembar on November 5, 2024 and sell it today you would earn a total of 0.00 from holding Putra Mandiri Jembar or generate 0.0% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Provident Agro Tbk vs. Putra Mandiri Jembar
Performance |
| Timeline |
| Provident Agro Tbk |
| Putra Mandiri Jembar |
Provident Agro and Putra Mandiri Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Provident Agro and Putra Mandiri
The main advantage of trading using opposite Provident Agro and Putra Mandiri positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Provident Agro position performs unexpectedly, Putra Mandiri 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 Putra Mandiri will offset losses from the drop in Putra Mandiri's long position.| Provident Agro vs. Dharma Satya Nusantara | Provident Agro vs. Salim Ivomas Pratama | Provident Agro vs. Sawit Sumbermas Sarana | Provident Agro vs. Austindo Nusantara Jaya |
| Putra Mandiri vs. Uni Charm Indonesia | Putra Mandiri vs. MNC Studios International | Putra Mandiri vs. Kencana Energi Lestari | Putra Mandiri vs. Bintang Oto Global |
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 Competition Analyzer module to analyze and compare many basic indicators for a group of related or unrelated entities.
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