Correlation Between PP Presisi and Indonesia Pondasi
Can any of the company-specific risk be diversified away by investing in both PP Presisi and Indonesia Pondasi 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 PP Presisi and Indonesia Pondasi into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between PP Presisi Tbk and Indonesia Pondasi Raya, you can compare the effects of market volatilities on PP Presisi and Indonesia Pondasi 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 PP Presisi with a short position of Indonesia Pondasi. Check out your portfolio center. Please also check ongoing floating volatility patterns of PP Presisi and Indonesia Pondasi.
Diversification Opportunities for PP Presisi and Indonesia Pondasi
-0.21 | Correlation Coefficient |
Very good diversification
The 3 months correlation between PPRE and Indonesia is -0.21. Overlapping area represents the amount of risk that can be diversified away by holding PP Presisi Tbk and Indonesia Pondasi Raya in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Indonesia Pondasi Raya and PP Presisi 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 PP Presisi Tbk are associated (or correlated) with Indonesia Pondasi. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Indonesia Pondasi Raya has no effect on the direction of PP Presisi i.e., PP Presisi and Indonesia Pondasi go up and down completely randomly.
Pair Corralation between PP Presisi and Indonesia Pondasi
Assuming the 90 days trading horizon PP Presisi Tbk is expected to under-perform the Indonesia Pondasi. In addition to that, PP Presisi is 1.1 times more volatile than Indonesia Pondasi Raya. It trades about -0.33 of its total potential returns per unit of risk. Indonesia Pondasi Raya is currently generating about -0.15 per unit of volatility. If you would invest 19,100 in Indonesia Pondasi Raya on September 2, 2024 and sell it today you would lose (1,600) from holding Indonesia Pondasi Raya or give up 8.38% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
PP Presisi Tbk vs. Indonesia Pondasi Raya
Performance |
| Timeline |
| PP Presisi Tbk |
| Indonesia Pondasi Raya |
PP Presisi and Indonesia Pondasi Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with PP Presisi and Indonesia Pondasi
The main advantage of trading using opposite PP Presisi and Indonesia Pondasi positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if PP Presisi position performs unexpectedly, Indonesia Pondasi 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 Indonesia Pondasi will offset losses from the drop in Indonesia Pondasi's long position.| PP Presisi vs. Matahari Department Store | PP Presisi vs. Multi Medika Internasional | PP Presisi vs. Visi Media Asia | PP Presisi vs. Bayan Resources Tbk |
| Indonesia Pondasi vs. Matahari Department Store | Indonesia Pondasi vs. Multi Medika Internasional | Indonesia Pondasi vs. Visi Media Asia | Indonesia Pondasi vs. Bayan Resources Tbk |
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 Earnings Calls module to check upcoming earnings announcements updated hourly across public exchanges.
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