Correlation Between Planet Properindo and Pratama Widya
Can any of the company-specific risk be diversified away by investing in both Planet Properindo and Pratama Widya 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 Planet Properindo and Pratama Widya into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Planet Properindo Jaya and Pratama Widya Tbk, you can compare the effects of market volatilities on Planet Properindo and Pratama Widya 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 Planet Properindo with a short position of Pratama Widya. Check out your portfolio center. Please also check ongoing floating volatility patterns of Planet Properindo and Pratama Widya.
Diversification Opportunities for Planet Properindo and Pratama Widya
-0.28 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Planet and Pratama is -0.28. Overlapping area represents the amount of risk that can be diversified away by holding Planet Properindo Jaya and Pratama Widya Tbk in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Pratama Widya Tbk and Planet Properindo 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 Planet Properindo Jaya are associated (or correlated) with Pratama Widya. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Pratama Widya Tbk has no effect on the direction of Planet Properindo i.e., Planet Properindo and Pratama Widya go up and down completely randomly.
Pair Corralation between Planet Properindo and Pratama Widya
Assuming the 90 days trading horizon Planet Properindo Jaya is expected to generate 9.16 times more return on investment than Pratama Widya. However, Planet Properindo is 9.16 times more volatile than Pratama Widya Tbk. It trades about 0.15 of its potential returns per unit of risk. Pratama Widya Tbk is currently generating about -0.19 per unit of risk. If you would invest 2,400 in Planet Properindo Jaya on September 4, 2024 and sell it today you would earn a total of 400.00 from holding Planet Properindo Jaya or generate 16.67% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 95.24% |
| Values | Daily Returns |
Planet Properindo Jaya vs. Pratama Widya Tbk
Performance |
| Timeline |
| Planet Properindo Jaya |
| Pratama Widya Tbk |
Planet Properindo and Pratama Widya Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Planet Properindo and Pratama Widya
The main advantage of trading using opposite Planet Properindo and Pratama Widya positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Planet Properindo position performs unexpectedly, Pratama Widya 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 Pratama Widya will offset losses from the drop in Pratama Widya's long position.| Planet Properindo vs. PT Boston Furniture | Planet Properindo vs. Sejahtera Bintang Abadi | Planet Properindo vs. Menteng Heritage Realty | Planet Properindo vs. Lancartama Sejati Tbk |
| Pratama Widya vs. Kencana Energi Lestari | Pratama Widya vs. Pelita Samudera Shipping | Pratama Widya vs. Paramita Bangun Sarana | Pratama Widya vs. Dana Brata Luhur |
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 Portfolio Holdings module to check your current holdings and cash postion to detemine if your portfolio needs rebalancing.
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