Correlation Between Pudjiadi Sons and PT Sari
Can any of the company-specific risk be diversified away by investing in both Pudjiadi Sons and PT Sari 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 PT Sari 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 PT Sari Kreasi, you can compare the effects of market volatilities on Pudjiadi Sons and PT Sari 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 PT Sari. Check out your portfolio center. Please also check ongoing floating volatility patterns of Pudjiadi Sons and PT Sari.
Diversification Opportunities for Pudjiadi Sons and PT Sari
0.32 | Correlation Coefficient |
Weak diversification
The 3 months correlation between Pudjiadi and RAFI is 0.32. Overlapping area represents the amount of risk that can be diversified away by holding Pudjiadi Sons Tbk and PT Sari Kreasi in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on PT Sari Kreasi 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 PT Sari. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of PT Sari Kreasi has no effect on the direction of Pudjiadi Sons i.e., Pudjiadi Sons and PT Sari go up and down completely randomly.
Pair Corralation between Pudjiadi Sons and PT Sari
Assuming the 90 days trading horizon Pudjiadi Sons Tbk is expected to generate 1.17 times more return on investment than PT Sari. However, Pudjiadi Sons is 1.17 times more volatile than PT Sari Kreasi. It trades about 0.15 of its potential returns per unit of risk. PT Sari Kreasi is currently generating about -0.04 per unit of risk. If you would invest 39,026 in Pudjiadi Sons Tbk on September 3, 2024 and sell it today you would earn a total of 96,974 from holding Pudjiadi Sons Tbk or generate 248.49% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 99.57% |
| Values | Daily Returns |
Pudjiadi Sons Tbk vs. PT Sari Kreasi
Performance |
| Timeline |
| Pudjiadi Sons Tbk |
| PT Sari Kreasi |
Pudjiadi Sons and PT Sari Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Pudjiadi Sons and PT Sari
The main advantage of trading using opposite Pudjiadi Sons and PT Sari positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Pudjiadi Sons position performs unexpectedly, PT Sari 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 Sari will offset losses from the drop in PT Sari's long position.| Pudjiadi Sons vs. First Media Tbk | Pudjiadi Sons vs. Visi Media Asia | Pudjiadi Sons vs. Lippo General Insurance | Pudjiadi Sons vs. Alumindo Light Metal |
| PT Sari vs. Pudjiadi Sons Tbk | PT Sari vs. Hotel Sahid Jaya | PT Sari vs. Panorama Sentrawisata Tbk | PT Sari vs. Pembangunan Jaya Ancol |
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 Competition Analyzer module to analyze and compare many basic indicators for a group of related or unrelated entities.
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