Correlation Between Pudjiadi Sons and Matahari Department
Can any of the company-specific risk be diversified away by investing in both Pudjiadi Sons and Matahari Department 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 Pudjiadi Sons and Matahari Department into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Pudjiadi Sons Tbk and Matahari Department Store, you can compare the effects of market volatilities on Pudjiadi Sons and Matahari Department 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 Pudjiadi Sons with a short position of Matahari Department. Check out your portfolio center. Please also check ongoing floating volatility patterns of Pudjiadi Sons and Matahari Department.
Diversification Opportunities for Pudjiadi Sons and Matahari Department
-0.57 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Pudjiadi and Matahari is -0.57. Overlapping area represents the amount of risk that can be diversified away by holding Pudjiadi Sons Tbk and Matahari Department Store in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Matahari Department Store and Pudjiadi Sons 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 Pudjiadi Sons Tbk are associated (or correlated) with Matahari Department. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Matahari Department Store has no effect on the direction of Pudjiadi Sons i.e., Pudjiadi Sons and Matahari Department go up and down completely randomly.
Pair Corralation between Pudjiadi Sons and Matahari Department
Assuming the 90 days trading horizon Pudjiadi Sons Tbk is expected to under-perform the Matahari Department. In addition to that, Pudjiadi Sons is 2.86 times more volatile than Matahari Department Store. It trades about -0.48 of its total potential returns per unit of risk. Matahari Department Store is currently generating about 0.48 per unit of volatility. If you would invest 141,500 in Matahari Department Store on November 3, 2024 and sell it today you would earn a total of 18,000 from holding Matahari Department Store or generate 12.72% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Pudjiadi Sons Tbk vs. Matahari Department Store
Performance |
| Timeline |
| Pudjiadi Sons Tbk |
| Matahari Department Store |
Pudjiadi Sons and Matahari Department Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Pudjiadi Sons and Matahari Department
The main advantage of trading using opposite Pudjiadi Sons and Matahari Department positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Pudjiadi Sons position performs unexpectedly, Matahari Department 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 Matahari Department will offset losses from the drop in Matahari Department's long position.| Pudjiadi Sons vs. Weha Transportasi Indonesia | Pudjiadi Sons vs. Inocycle Technology Tbk | Pudjiadi Sons vs. Siloam International Hospitals | Pudjiadi Sons vs. Trinitan Metals and |
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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 Financial Widgets module to easily integrated Macroaxis content with over 30 different plug-and-play financial widgets.
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