Correlation Between Cikarang Listrindo and Puradelta Lestari
Can any of the company-specific risk be diversified away by investing in both Cikarang Listrindo and Puradelta Lestari 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 Cikarang Listrindo and Puradelta Lestari into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Cikarang Listrindo Tbk and Puradelta Lestari PT, you can compare the effects of market volatilities on Cikarang Listrindo and Puradelta Lestari 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 Cikarang Listrindo with a short position of Puradelta Lestari. Check out your portfolio center. Please also check ongoing floating volatility patterns of Cikarang Listrindo and Puradelta Lestari.
Diversification Opportunities for Cikarang Listrindo and Puradelta Lestari
-0.15 | Correlation Coefficient |
Good diversification
The 3 months correlation between Cikarang and Puradelta is -0.15. Overlapping area represents the amount of risk that can be diversified away by holding Cikarang Listrindo Tbk and Puradelta Lestari PT in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Puradelta Lestari and Cikarang Listrindo 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 Cikarang Listrindo Tbk are associated (or correlated) with Puradelta Lestari. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Puradelta Lestari has no effect on the direction of Cikarang Listrindo i.e., Cikarang Listrindo and Puradelta Lestari go up and down completely randomly.
Pair Corralation between Cikarang Listrindo and Puradelta Lestari
Assuming the 90 days trading horizon Cikarang Listrindo Tbk is expected to generate 0.76 times more return on investment than Puradelta Lestari. However, Cikarang Listrindo Tbk is 1.32 times less risky than Puradelta Lestari. It trades about -0.06 of its potential returns per unit of risk. Puradelta Lestari PT is currently generating about -0.16 per unit of risk. If you would invest 70,500 in Cikarang Listrindo Tbk on August 25, 2024 and sell it today you would lose (500.00) from holding Cikarang Listrindo Tbk or give up 0.71% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Cikarang Listrindo Tbk vs. Puradelta Lestari PT
Performance |
| Timeline |
| Cikarang Listrindo Tbk |
| Puradelta Lestari |
Cikarang Listrindo and Puradelta Lestari Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Cikarang Listrindo and Puradelta Lestari
The main advantage of trading using opposite Cikarang Listrindo and Puradelta Lestari positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Cikarang Listrindo position performs unexpectedly, Puradelta Lestari 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 Puradelta Lestari will offset losses from the drop in Puradelta Lestari's long position.| Cikarang Listrindo vs. Puradelta Lestari PT | Cikarang Listrindo vs. Mitra Pinasthika Mustika | Cikarang Listrindo vs. Wijaya Karya Bangunan | Cikarang Listrindo vs. PT Sarana Menara |
| Puradelta Lestari vs. Pakuwon Jati Tbk | Puradelta Lestari vs. Sido Muncul PT | Puradelta Lestari vs. Bekasi Fajar Industrial | Puradelta Lestari vs. Bank Pembangunan Timur |
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 Companies Directory module to evaluate performance of over 100,000 Stocks, Funds, and ETFs against different fundamentals.
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