Correlation Between Pt Pradiksi and Provident Agro
Can any of the company-specific risk be diversified away by investing in both Pt Pradiksi and Provident Agro 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 Pt Pradiksi and Provident Agro into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Pt Pradiksi Gunatama and Provident Agro Tbk, you can compare the effects of market volatilities on Pt Pradiksi and Provident Agro 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 Pt Pradiksi with a short position of Provident Agro. Check out your portfolio center. Please also check ongoing floating volatility patterns of Pt Pradiksi and Provident Agro.
Diversification Opportunities for Pt Pradiksi and Provident Agro
-0.16 | Correlation Coefficient |
Good diversification
The 3 months correlation between PGUN and Provident is -0.16. Overlapping area represents the amount of risk that can be diversified away by holding Pt Pradiksi Gunatama and Provident Agro Tbk in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Provident Agro Tbk and Pt Pradiksi 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 Pt Pradiksi Gunatama are associated (or correlated) with Provident Agro. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Provident Agro Tbk has no effect on the direction of Pt Pradiksi i.e., Pt Pradiksi and Provident Agro go up and down completely randomly.
Pair Corralation between Pt Pradiksi and Provident Agro
Assuming the 90 days trading horizon Pt Pradiksi Gunatama is expected to generate 2.87 times more return on investment than Provident Agro. However, Pt Pradiksi is 2.87 times more volatile than Provident Agro Tbk. It trades about 0.69 of its potential returns per unit of risk. Provident Agro Tbk is currently generating about -0.16 per unit of risk. If you would invest 42,400 in Pt Pradiksi Gunatama on November 5, 2024 and sell it today you would earn a total of 31,100 from holding Pt Pradiksi Gunatama or generate 73.35% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Pt Pradiksi Gunatama vs. Provident Agro Tbk
Performance |
| Timeline |
| Pt Pradiksi Gunatama |
| Provident Agro Tbk |
Pt Pradiksi and Provident Agro Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Pt Pradiksi and Provident Agro
The main advantage of trading using opposite Pt Pradiksi and Provident Agro positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Pt Pradiksi position performs unexpectedly, Provident Agro 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 Provident Agro will offset losses from the drop in Provident Agro's long position.| Pt Pradiksi vs. Triputra Agro Persada | Pt Pradiksi vs. Dayamitra Telekomunikasi PT | Pt Pradiksi vs. RMK Energy PT | Pt Pradiksi vs. Dharma Satya Nusantara |
| Provident Agro vs. Dharma Satya Nusantara | Provident Agro vs. Salim Ivomas Pratama | Provident Agro vs. Sawit Sumbermas Sarana | Provident Agro vs. Austindo Nusantara 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 Technical Analysis module to check basic technical indicators and analysis based on most latest market data.
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