Correlation Between Paramita Bangun and Putra Rajawali
Can any of the company-specific risk be diversified away by investing in both Paramita Bangun and Putra Rajawali 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 Paramita Bangun and Putra Rajawali into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Paramita Bangun Sarana and Putra Rajawali Kencana, you can compare the effects of market volatilities on Paramita Bangun and Putra Rajawali 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 Paramita Bangun with a short position of Putra Rajawali. Check out your portfolio center. Please also check ongoing floating volatility patterns of Paramita Bangun and Putra Rajawali.
Diversification Opportunities for Paramita Bangun and Putra Rajawali
-0.76 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Paramita and Putra is -0.76. Overlapping area represents the amount of risk that can be diversified away by holding Paramita Bangun Sarana and Putra Rajawali Kencana in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Putra Rajawali Kencana and Paramita Bangun 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 Paramita Bangun Sarana are associated (or correlated) with Putra Rajawali. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Putra Rajawali Kencana has no effect on the direction of Paramita Bangun i.e., Paramita Bangun and Putra Rajawali go up and down completely randomly.
Pair Corralation between Paramita Bangun and Putra Rajawali
Assuming the 90 days trading horizon Paramita Bangun Sarana is expected to generate 0.23 times more return on investment than Putra Rajawali. However, Paramita Bangun Sarana is 4.38 times less risky than Putra Rajawali. It trades about 0.09 of its potential returns per unit of risk. Putra Rajawali Kencana is currently generating about -0.08 per unit of risk. If you would invest 26,678 in Paramita Bangun Sarana on September 2, 2024 and sell it today you would earn a total of 7,122 from holding Paramita Bangun Sarana or generate 26.7% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Paramita Bangun Sarana vs. Putra Rajawali Kencana
Performance |
| Timeline |
| Paramita Bangun Sarana |
| Putra Rajawali Kencana |
Paramita Bangun and Putra Rajawali Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Paramita Bangun and Putra Rajawali
The main advantage of trading using opposite Paramita Bangun and Putra Rajawali positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Paramita Bangun position performs unexpectedly, Putra Rajawali 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 Rajawali will offset losses from the drop in Putra Rajawali's long position.| Paramita Bangun vs. Nusa Raya Cipta | Paramita Bangun vs. Indonesia Pondasi Raya | Paramita Bangun vs. Pelayaran Nelly Dwi | Paramita Bangun vs. PP Presisi Tbk |
| Putra Rajawali vs. Kapuas Prima Coal | Putra Rajawali vs. Karya Bersama Anugerah | Putra Rajawali vs. Era Mandiri Cemerlang | Putra Rajawali vs. PP Presisi 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 CEOs Directory module to screen CEOs from public companies around the world.
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