Correlation Between Pan Brothers and Pembangunan Jaya
Can any of the company-specific risk be diversified away by investing in both Pan Brothers and Pembangunan Jaya 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 Pembangunan Jaya 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 Pembangunan Jaya Ancol, you can compare the effects of market volatilities on Pan Brothers and Pembangunan Jaya 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 Pembangunan Jaya. Check out your portfolio center. Please also check ongoing floating volatility patterns of Pan Brothers and Pembangunan Jaya.
Diversification Opportunities for Pan Brothers and Pembangunan Jaya
-0.59 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Pan and Pembangunan is -0.59. Overlapping area represents the amount of risk that can be diversified away by holding Pan Brothers Tbk and Pembangunan Jaya Ancol in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Pembangunan Jaya Ancol 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 Pembangunan Jaya. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Pembangunan Jaya Ancol has no effect on the direction of Pan Brothers i.e., Pan Brothers and Pembangunan Jaya go up and down completely randomly.
Pair Corralation between Pan Brothers and Pembangunan Jaya
Assuming the 90 days trading horizon Pan Brothers Tbk is expected to generate 3.09 times more return on investment than Pembangunan Jaya. However, Pan Brothers is 3.09 times more volatile than Pembangunan Jaya Ancol. It trades about 0.21 of its potential returns per unit of risk. Pembangunan Jaya Ancol is currently generating about -0.37 per unit of risk. If you would invest 2,100 in Pan Brothers Tbk on August 29, 2024 and sell it today you would earn a total of 200.00 from holding Pan Brothers Tbk or generate 9.52% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 95.65% |
| Values | Daily Returns |
Pan Brothers Tbk vs. Pembangunan Jaya Ancol
Performance |
| Timeline |
| Pan Brothers Tbk |
| Pembangunan Jaya Ancol |
Pan Brothers and Pembangunan Jaya Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Pan Brothers and Pembangunan Jaya
The main advantage of trading using opposite Pan Brothers and Pembangunan Jaya positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Pan Brothers position performs unexpectedly, Pembangunan Jaya 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 Pembangunan Jaya will offset losses from the drop in Pembangunan Jaya's long position.| Pan Brothers vs. Pembangunan Jaya Ancol | Pan Brothers vs. Panorama Sentrawisata Tbk | Pan Brothers vs. Millennium Pharmacon International | Pan Brothers vs. Tempo Inti Media |
| Pembangunan Jaya vs. Lautan Luas Tbk | Pembangunan Jaya vs. Panorama Sentrawisata Tbk | Pembangunan Jaya vs. Multi Indocitra Tbk | Pembangunan Jaya vs. Hotel Sahid Jaya |
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 Bond Analysis module to evaluate and analyze corporate bonds as a potential investment for your portfolios..
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