Correlation Between Pan Brothers and Polychem Indonesia
Can any of the company-specific risk be diversified away by investing in both Pan Brothers and Polychem Indonesia 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 Pan Brothers and Polychem Indonesia into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Pan Brothers Tbk and Polychem Indonesia Tbk, you can compare the effects of market volatilities on Pan Brothers and Polychem Indonesia 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 Pan Brothers with a short position of Polychem Indonesia. Check out your portfolio center. Please also check ongoing floating volatility patterns of Pan Brothers and Polychem Indonesia.
Diversification Opportunities for Pan Brothers and Polychem Indonesia
-0.63 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Pan and Polychem is -0.63. Overlapping area represents the amount of risk that can be diversified away by holding Pan Brothers Tbk and Polychem Indonesia Tbk in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Polychem Indonesia Tbk and Pan Brothers 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 Pan Brothers Tbk are associated (or correlated) with Polychem Indonesia. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Polychem Indonesia Tbk has no effect on the direction of Pan Brothers i.e., Pan Brothers and Polychem Indonesia go up and down completely randomly.
Pair Corralation between Pan Brothers and Polychem Indonesia
If you would invest 2,300 in Pan Brothers Tbk on September 1, 2024 and sell it today you would earn a total of 0.00 from holding Pan Brothers Tbk or generate 0.0% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 95.45% |
| Values | Daily Returns |
Pan Brothers Tbk vs. Polychem Indonesia Tbk
Performance |
| Timeline |
| Pan Brothers Tbk |
| Polychem Indonesia Tbk |
Pan Brothers and Polychem Indonesia Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Pan Brothers and Polychem Indonesia
The main advantage of trading using opposite Pan Brothers and Polychem Indonesia positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Pan Brothers position performs unexpectedly, Polychem Indonesia 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 Polychem Indonesia will offset losses from the drop in Polychem Indonesia's long position.| Pan Brothers vs. Ricky Putra Globalindo | Pan Brothers vs. Asia Pacific Fibers | Pan Brothers vs. Asia Pacific Investama | Pan Brothers vs. Prima Alloy Steel |
| Polychem Indonesia vs. Perusahaan Gas Negara | Polychem Indonesia vs. Telkom Indonesia Tbk | Polychem Indonesia vs. Mitra Pinasthika Mustika | Polychem Indonesia 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 Financial Widgets module to easily integrated Macroaxis content with over 30 different plug-and-play financial widgets.
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