Correlation Between Bima Sakti and PP Presisi
Can any of the company-specific risk be diversified away by investing in both Bima Sakti and PP Presisi 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 Bima Sakti and PP Presisi into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Bima Sakti Pertiwi and PP Presisi Tbk, you can compare the effects of market volatilities on Bima Sakti and PP Presisi 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 Bima Sakti with a short position of PP Presisi. Check out your portfolio center. Please also check ongoing floating volatility patterns of Bima Sakti and PP Presisi.
Diversification Opportunities for Bima Sakti and PP Presisi
0.55 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Bima and PPRE is 0.55. Overlapping area represents the amount of risk that can be diversified away by holding Bima Sakti Pertiwi and PP Presisi Tbk in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on PP Presisi Tbk and Bima Sakti 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 Bima Sakti Pertiwi are associated (or correlated) with PP Presisi. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of PP Presisi Tbk has no effect on the direction of Bima Sakti i.e., Bima Sakti and PP Presisi go up and down completely randomly.
Pair Corralation between Bima Sakti and PP Presisi
Assuming the 90 days trading horizon Bima Sakti Pertiwi is expected to generate 0.6 times more return on investment than PP Presisi. However, Bima Sakti Pertiwi is 1.68 times less risky than PP Presisi. It trades about -0.05 of its potential returns per unit of risk. PP Presisi Tbk is currently generating about -0.28 per unit of risk. If you would invest 5,200 in Bima Sakti Pertiwi on September 3, 2024 and sell it today you would lose (100.00) from holding Bima Sakti Pertiwi or give up 1.92% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Bima Sakti Pertiwi vs. PP Presisi Tbk
Performance |
| Timeline |
| Bima Sakti Pertiwi |
| PP Presisi Tbk |
Bima Sakti and PP Presisi Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Bima Sakti and PP Presisi
The main advantage of trading using opposite Bima Sakti and PP Presisi positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Bima Sakti position performs unexpectedly, PP Presisi 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 PP Presisi will offset losses from the drop in PP Presisi's long position.| Bima Sakti vs. Prima Alloy Steel | Bima Sakti vs. Weha Transportasi Indonesia | Bima Sakti vs. PT Indofood Sukses | Bima Sakti vs. Trinitan Metals and |
| PP Presisi vs. Intanwijaya Internasional Tbk | PP Presisi vs. Champion Pacific Indonesia | PP Presisi vs. Mitra Pinasthika Mustika | PP Presisi vs. Jakarta Int Hotels |
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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