Correlation Between Prodia Widyahusada and Royal Prima
Can any of the company-specific risk be diversified away by investing in both Prodia Widyahusada and Royal Prima 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 Royal Prima 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 Royal Prima PT, you can compare the effects of market volatilities on Prodia Widyahusada and Royal Prima 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 Royal Prima. Check out your portfolio center. Please also check ongoing floating volatility patterns of Prodia Widyahusada and Royal Prima.
Diversification Opportunities for Prodia Widyahusada and Royal Prima
0.52 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Prodia and Royal is 0.52. Overlapping area represents the amount of risk that can be diversified away by holding Prodia Widyahusada Tbk and Royal Prima PT in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Royal Prima PT 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 Royal Prima. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Royal Prima PT has no effect on the direction of Prodia Widyahusada i.e., Prodia Widyahusada and Royal Prima go up and down completely randomly.
Pair Corralation between Prodia Widyahusada and Royal Prima
Assuming the 90 days trading horizon Prodia Widyahusada Tbk is expected to generate 0.65 times more return on investment than Royal Prima. However, Prodia Widyahusada Tbk is 1.54 times less risky than Royal Prima. It trades about -0.27 of its potential returns per unit of risk. Royal Prima PT is currently generating about -0.25 per unit of risk. If you would invest 299,000 in Prodia Widyahusada Tbk on September 1, 2024 and sell it today you would lose (23,000) from holding Prodia Widyahusada Tbk or give up 7.69% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 95.45% |
| Values | Daily Returns |
Prodia Widyahusada Tbk vs. Royal Prima PT
Performance |
| Timeline |
| Prodia Widyahusada Tbk |
| Royal Prima PT |
Prodia Widyahusada and Royal Prima Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Prodia Widyahusada and Royal Prima
The main advantage of trading using opposite Prodia Widyahusada and Royal Prima positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Prodia Widyahusada position performs unexpectedly, Royal Prima 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 Royal Prima will offset losses from the drop in Royal Prima'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 |
| Royal Prima vs. Medikaloka Hermina PT | Royal Prima vs. Sejahteraraya Anugrahjaya Tbk | Royal Prima vs. Prodia Widyahusada Tbk | Royal Prima vs. Sarana Meditama Metropolitan |
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 Stock Tickers module to use high-impact, comprehensive, and customizable stock tickers that can be easily integrated to any websites.
Other Complementary Tools
| My Watchlist Analysis Analyze my current watchlist and to refresh optimization strategy. Macroaxis watchlist is based on self-learning algorithm to remember stocks you like | |
| Idea Breakdown Analyze constituents of all Macroaxis ideas. Macroaxis investment ideas are predefined, sector-focused investing themes | |
| Efficient Frontier Plot and analyze your portfolio and positions against risk-return landscape of the market. | |
| Pair Correlation Compare performance and examine fundamental relationship between any two equity instruments | |
| Watchlist Optimization Optimize watchlists to build efficient portfolios or rebalance existing positions based on the mean-variance optimization algorithm |