Correlation Between Panca Budi and Mark Dynamics
Can any of the company-specific risk be diversified away by investing in both Panca Budi and Mark Dynamics 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 Panca Budi and Mark Dynamics into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Panca Budi Idaman and Mark Dynamics Indonesia, you can compare the effects of market volatilities on Panca Budi and Mark Dynamics 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 Panca Budi with a short position of Mark Dynamics. Check out your portfolio center. Please also check ongoing floating volatility patterns of Panca Budi and Mark Dynamics.
Diversification Opportunities for Panca Budi and Mark Dynamics
0.51 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Panca and Mark is 0.51. Overlapping area represents the amount of risk that can be diversified away by holding Panca Budi Idaman and Mark Dynamics Indonesia in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Mark Dynamics Indonesia and Panca Budi 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 Panca Budi Idaman are associated (or correlated) with Mark Dynamics. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Mark Dynamics Indonesia has no effect on the direction of Panca Budi i.e., Panca Budi and Mark Dynamics go up and down completely randomly.
Pair Corralation between Panca Budi and Mark Dynamics
Assuming the 90 days trading horizon Panca Budi Idaman is expected to generate 1.14 times more return on investment than Mark Dynamics. However, Panca Budi is 1.14 times more volatile than Mark Dynamics Indonesia. It trades about 0.14 of its potential returns per unit of risk. Mark Dynamics Indonesia is currently generating about -0.11 per unit of risk. If you would invest 48,200 in Panca Budi Idaman on August 28, 2024 and sell it today you would earn a total of 3,800 from holding Panca Budi Idaman or generate 7.88% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Panca Budi Idaman vs. Mark Dynamics Indonesia
Performance |
| Timeline |
| Panca Budi Idaman |
| Mark Dynamics Indonesia |
Panca Budi and Mark Dynamics Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Panca Budi and Mark Dynamics
The main advantage of trading using opposite Panca Budi and Mark Dynamics positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Panca Budi position performs unexpectedly, Mark Dynamics 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 Mark Dynamics will offset losses from the drop in Mark Dynamics' long position.| Panca Budi vs. Mitrabara Adiperdana PT | Panca Budi vs. Mark Dynamics Indonesia | Panca Budi vs. Prodia Widyahusada Tbk | Panca Budi vs. Selamat Sempurna 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 Fundamentals Comparison module to compare fundamentals across multiple equities to find investing opportunities.
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