Correlation Between Paramita Bangun and Dana Brata
Can any of the company-specific risk be diversified away by investing in both Paramita Bangun and Dana Brata 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 Dana Brata 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 Dana Brata Luhur, you can compare the effects of market volatilities on Paramita Bangun and Dana Brata 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 Dana Brata. Check out your portfolio center. Please also check ongoing floating volatility patterns of Paramita Bangun and Dana Brata.
Diversification Opportunities for Paramita Bangun and Dana Brata
-0.31 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Paramita and Dana is -0.31. Overlapping area represents the amount of risk that can be diversified away by holding Paramita Bangun Sarana and Dana Brata Luhur in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Dana Brata Luhur 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 Dana Brata. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Dana Brata Luhur has no effect on the direction of Paramita Bangun i.e., Paramita Bangun and Dana Brata go up and down completely randomly.
Pair Corralation between Paramita Bangun and Dana Brata
Assuming the 90 days trading horizon Paramita Bangun Sarana is expected to generate 1.15 times more return on investment than Dana Brata. However, Paramita Bangun is 1.15 times more volatile than Dana Brata Luhur. It trades about 0.09 of its potential returns per unit of risk. Dana Brata Luhur is currently generating about -0.02 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 | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Paramita Bangun Sarana vs. Dana Brata Luhur
Performance |
| Timeline |
| Paramita Bangun Sarana |
| Dana Brata Luhur |
Paramita Bangun and Dana Brata Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Paramita Bangun and Dana Brata
The main advantage of trading using opposite Paramita Bangun and Dana Brata positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Paramita Bangun position performs unexpectedly, Dana Brata 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 Dana Brata will offset losses from the drop in Dana Brata'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 |
| Dana Brata vs. Pelita Samudera Shipping | Dana Brata vs. Trans Power Marine | Dana Brata vs. Kencana Energi Lestari | Dana Brata vs. Pelayaran Nelly Dwi |
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 Price Exposure Probability module to analyze equity upside and downside potential for a given time horizon across multiple markets.
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