Correlation Between Pt Pradiksi and PT Boston
Can any of the company-specific risk be diversified away by investing in both Pt Pradiksi and PT Boston 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 PT Boston 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 PT Boston Furniture, you can compare the effects of market volatilities on Pt Pradiksi and PT Boston 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 PT Boston. Check out your portfolio center. Please also check ongoing floating volatility patterns of Pt Pradiksi and PT Boston.
Diversification Opportunities for Pt Pradiksi and PT Boston
0.08 | Correlation Coefficient |
Significant diversification
The 3 months correlation between PGUN and SOFA is 0.08. Overlapping area represents the amount of risk that can be diversified away by holding Pt Pradiksi Gunatama and PT Boston Furniture in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on PT Boston Furniture 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 PT Boston. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of PT Boston Furniture has no effect on the direction of Pt Pradiksi i.e., Pt Pradiksi and PT Boston go up and down completely randomly.
Pair Corralation between Pt Pradiksi and PT Boston
Assuming the 90 days trading horizon Pt Pradiksi is expected to generate 1.9 times less return on investment than PT Boston. But when comparing it to its historical volatility, Pt Pradiksi Gunatama is 2.44 times less risky than PT Boston. It trades about 0.31 of its potential returns per unit of risk. PT Boston Furniture is currently generating about 0.24 of returns per unit of risk over similar time horizon. If you would invest 1,900 in PT Boston Furniture on November 2, 2024 and sell it today you would earn a total of 2,300 from holding PT Boston Furniture or generate 121.05% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Pt Pradiksi Gunatama vs. PT Boston Furniture
Performance |
| Timeline |
| Pt Pradiksi Gunatama |
| PT Boston Furniture |
Pt Pradiksi and PT Boston Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Pt Pradiksi and PT Boston
The main advantage of trading using opposite Pt Pradiksi and PT Boston positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Pt Pradiksi position performs unexpectedly, PT Boston 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 PT Boston will offset losses from the drop in PT Boston's long position.| Pt Pradiksi vs. Mahkota Group Tbk | Pt Pradiksi vs. Palma Serasih PT | Pt Pradiksi vs. Cisadane Sawit Raya | Pt Pradiksi vs. Diamond Food Indonesia |
| PT Boston vs. Pt Pradiksi Gunatama | PT Boston vs. Sunindo Adipersada Tbk | PT Boston vs. Planet Properindo Jaya | PT Boston vs. Pt Pakuan 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 Price Transformation module to use Price Transformation models to analyze the depth of different equity instruments across global markets.
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