Correlation Between PP Presisi and Cikarang Listrindo
Can any of the company-specific risk be diversified away by investing in both PP Presisi and Cikarang Listrindo 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 Cikarang Listrindo 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 Cikarang Listrindo Tbk, you can compare the effects of market volatilities on PP Presisi and Cikarang Listrindo 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 Cikarang Listrindo. Check out your portfolio center. Please also check ongoing floating volatility patterns of PP Presisi and Cikarang Listrindo.
Diversification Opportunities for PP Presisi and Cikarang Listrindo
-0.27 | Correlation Coefficient |
Very good diversification
The 3 months correlation between PPRE and Cikarang is -0.27. Overlapping area represents the amount of risk that can be diversified away by holding PP Presisi Tbk and Cikarang Listrindo Tbk in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Cikarang Listrindo Tbk 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 Cikarang Listrindo. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Cikarang Listrindo Tbk has no effect on the direction of PP Presisi i.e., PP Presisi and Cikarang Listrindo go up and down completely randomly.
Pair Corralation between PP Presisi and Cikarang Listrindo
Assuming the 90 days trading horizon PP Presisi Tbk is expected to under-perform the Cikarang Listrindo. In addition to that, PP Presisi is 2.32 times more volatile than Cikarang Listrindo Tbk. It trades about -0.21 of its total potential returns per unit of risk. Cikarang Listrindo Tbk is currently generating about -0.18 per unit of volatility. If you would invest 69,500 in Cikarang Listrindo Tbk on November 3, 2024 and sell it today you would lose (2,500) from holding Cikarang Listrindo Tbk or give up 3.6% 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. Cikarang Listrindo Tbk
Performance |
| Timeline |
| PP Presisi Tbk |
| Cikarang Listrindo Tbk |
PP Presisi and Cikarang Listrindo Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with PP Presisi and Cikarang Listrindo
The main advantage of trading using opposite PP Presisi and Cikarang Listrindo positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if PP Presisi position performs unexpectedly, Cikarang Listrindo 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 Cikarang Listrindo will offset losses from the drop in Cikarang Listrindo'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 |
| Cikarang Listrindo vs. Puradelta Lestari PT | Cikarang Listrindo vs. Mitra Pinasthika Mustika | Cikarang Listrindo vs. Wijaya Karya Bangunan | Cikarang Listrindo vs. PT Sarana Menara |
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 Idea Breakdown module to analyze constituents of all Macroaxis ideas. Macroaxis investment ideas are predefined, sector-focused investing themes.
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