Correlation Between PP Presisi and Bima Sakti
Can any of the company-specific risk be diversified away by investing in both PP Presisi and Bima Sakti 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 Bima Sakti 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 Bima Sakti Pertiwi, you can compare the effects of market volatilities on PP Presisi and Bima Sakti 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 Bima Sakti. Check out your portfolio center. Please also check ongoing floating volatility patterns of PP Presisi and Bima Sakti.
Diversification Opportunities for PP Presisi and Bima Sakti
0.54 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between PPRE and Bima is 0.54. Overlapping area represents the amount of risk that can be diversified away by holding PP Presisi Tbk and Bima Sakti Pertiwi in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Bima Sakti Pertiwi 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 Bima Sakti. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Bima Sakti Pertiwi has no effect on the direction of PP Presisi i.e., PP Presisi and Bima Sakti go up and down completely randomly.
Pair Corralation between PP Presisi and Bima Sakti
Assuming the 90 days trading horizon PP Presisi Tbk is expected to generate 1.07 times more return on investment than Bima Sakti. However, PP Presisi is 1.07 times more volatile than Bima Sakti Pertiwi. It trades about -0.01 of its potential returns per unit of risk. Bima Sakti Pertiwi is currently generating about -0.02 per unit of risk. If you would invest 7,500 in PP Presisi Tbk on September 4, 2024 and sell it today you would lose (1,500) from holding PP Presisi Tbk or give up 20.0% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 99.57% |
| Values | Daily Returns |
PP Presisi Tbk vs. Bima Sakti Pertiwi
Performance |
| Timeline |
| PP Presisi Tbk |
| Bima Sakti Pertiwi |
PP Presisi and Bima Sakti Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with PP Presisi and Bima Sakti
The main advantage of trading using opposite PP Presisi and Bima Sakti positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if PP Presisi position performs unexpectedly, Bima Sakti 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 Bima Sakti will offset losses from the drop in Bima Sakti's long position.| PP Presisi vs. Wijaya Karya Bangunan | PP Presisi vs. PP Properti Tbk | PP Presisi vs. Wijaya Karya Beton | PP Presisi vs. Soechi Lines Tbk |
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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 Portfolio Center module to all portfolio management and optimization tools to improve performance of your portfolios.
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