Correlation Between Pt Pradiksi and Pt Pakuan

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Can any of the company-specific risk be diversified away by investing in both Pt Pradiksi and Pt Pakuan 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 Pakuan 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 Pakuan Tbk, you can compare the effects of market volatilities on Pt Pradiksi and Pt Pakuan 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 Pakuan. Check out your portfolio center. Please also check ongoing floating volatility patterns of Pt Pradiksi and Pt Pakuan.

Diversification Opportunities for Pt Pradiksi and Pt Pakuan

0.59
  Correlation Coefficient

Very weak diversification

The 3 months correlation between PGUN and UANG is 0.59. Overlapping area represents the amount of risk that can be diversified away by holding Pt Pradiksi Gunatama and Pt Pakuan Tbk in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Pt Pakuan 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 Pt Pakuan. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Pt Pakuan Tbk has no effect on the direction of Pt Pradiksi i.e., Pt Pradiksi and Pt Pakuan go up and down completely randomly.

Pair Corralation between Pt Pradiksi and Pt Pakuan

Assuming the 90 days trading horizon Pt Pradiksi Gunatama is expected to under-perform the Pt Pakuan. But the stock apears to be less risky and, when comparing its historical volatility, Pt Pradiksi Gunatama is 3.93 times less risky than Pt Pakuan. The stock trades about -0.04 of its potential returns per unit of risk. The Pt Pakuan Tbk is currently generating about 0.06 of returns per unit of risk over similar time horizon. If you would invest  33,436  in Pt Pakuan Tbk on September 12, 2024 and sell it today you would earn a total of  40,064  from holding Pt Pakuan Tbk or generate 119.82% return on investment over 90 days.
Time Period3 Months [change]
DirectionMoves Together 
StrengthWeak
Accuracy99.72%
ValuesDaily Returns

Pt Pradiksi Gunatama  vs.  Pt Pakuan Tbk

 Performance 
       Timeline  
Pt Pradiksi Gunatama 

Risk-Adjusted Performance

0 of 100

 
Weak
 
Strong
Very Weak
Over the last 90 days Pt Pradiksi Gunatama has generated negative risk-adjusted returns adding no value to investors with long positions. Despite quite persistent forward-looking signals, Pt Pradiksi is not utilizing all of its potentials. The latest stock price mess, may contribute to short-term losses for the institutional investors.
Pt Pakuan Tbk 

Risk-Adjusted Performance

0 of 100

 
Weak
 
Strong
Very Weak
Over the last 90 days Pt Pakuan Tbk has generated negative risk-adjusted returns adding no value to investors with long positions. Despite quite persistent forward-looking signals, Pt Pakuan is not utilizing all of its potentials. The latest stock price mess, may contribute to short-term losses for the institutional investors.

Pt Pradiksi and Pt Pakuan Volatility Contrast

   Predicted Return Density   
       Returns  

Pair Trading with Pt Pradiksi and Pt Pakuan

The main advantage of trading using opposite Pt Pradiksi and Pt Pakuan positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Pt Pradiksi position performs unexpectedly, Pt Pakuan 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 Pakuan will offset losses from the drop in Pt Pakuan's long position.
The idea behind Pt Pradiksi Gunatama and Pt Pakuan Tbk pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.
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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 Competition Analyzer module to analyze and compare many basic indicators for a group of related or unrelated entities.

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