Correlation Between Prodia Widyahusada and Panca Budi
Can any of the company-specific risk be diversified away by investing in both Prodia Widyahusada and Panca Budi 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 Prodia Widyahusada and Panca Budi into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Prodia Widyahusada Tbk and Panca Budi Idaman, you can compare the effects of market volatilities on Prodia Widyahusada and Panca Budi 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 Prodia Widyahusada with a short position of Panca Budi. Check out your portfolio center. Please also check ongoing floating volatility patterns of Prodia Widyahusada and Panca Budi.
Diversification Opportunities for Prodia Widyahusada and Panca Budi
0.54 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Prodia and Panca is 0.54. Overlapping area represents the amount of risk that can be diversified away by holding Prodia Widyahusada Tbk and Panca Budi Idaman in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Panca Budi Idaman and Prodia Widyahusada 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 Prodia Widyahusada Tbk are associated (or correlated) with Panca Budi. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Panca Budi Idaman has no effect on the direction of Prodia Widyahusada i.e., Prodia Widyahusada and Panca Budi go up and down completely randomly.
Pair Corralation between Prodia Widyahusada and Panca Budi
Assuming the 90 days trading horizon Prodia Widyahusada Tbk is expected to under-perform the Panca Budi. But the stock apears to be less risky and, when comparing its historical volatility, Prodia Widyahusada Tbk is 23.55 times less risky than Panca Budi. The stock trades about -0.07 of its potential returns per unit of risk. The Panca Budi Idaman is currently generating about 0.04 of returns per unit of risk over similar time horizon. If you would invest 33,959 in Panca Budi Idaman on November 19, 2024 and sell it today you would earn a total of 16,041 from holding Panca Budi Idaman or generate 47.24% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Prodia Widyahusada Tbk vs. Panca Budi Idaman
Performance |
| Timeline |
| Prodia Widyahusada Tbk |
| Panca Budi Idaman |
Prodia Widyahusada and Panca Budi Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Prodia Widyahusada and Panca Budi
The main advantage of trading using opposite Prodia Widyahusada and Panca Budi positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Prodia Widyahusada position performs unexpectedly, Panca Budi 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 Panca Budi will offset losses from the drop in Panca Budi's long position.| Prodia Widyahusada vs. Medikaloka Hermina PT | Prodia Widyahusada vs. Mitra Keluarga Karyasehat | Prodia Widyahusada vs. Siloam International Hospitals | Prodia Widyahusada vs. Saratoga Investama Sedaya |
| Panca Budi vs. Mitrabara Adiperdana PT | Panca Budi vs. Mark Dynamics Indonesia | Panca Budi vs. Prodia Widyahusada Tbk | Panca Budi vs. Selamat Sempurna 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 Global Correlations module to find global opportunities by holding instruments from different markets.
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