Correlation Between Royal Prima and Personel Alih
Can any of the company-specific risk be diversified away by investing in both Royal Prima and Personel Alih 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 Royal Prima and Personel Alih into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Royal Prima PT and Personel Alih Daya, you can compare the effects of market volatilities on Royal Prima and Personel Alih 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 Royal Prima with a short position of Personel Alih. Check out your portfolio center. Please also check ongoing floating volatility patterns of Royal Prima and Personel Alih.
Diversification Opportunities for Royal Prima and Personel Alih
-0.18 | Correlation Coefficient |
Good diversification
The 3 months correlation between Royal and Personel is -0.18. Overlapping area represents the amount of risk that can be diversified away by holding Royal Prima PT and Personel Alih Daya in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Personel Alih Daya and Royal Prima 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 Royal Prima PT are associated (or correlated) with Personel Alih. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Personel Alih Daya has no effect on the direction of Royal Prima i.e., Royal Prima and Personel Alih go up and down completely randomly.
Pair Corralation between Royal Prima and Personel Alih
Assuming the 90 days trading horizon Royal Prima PT is expected to generate 0.93 times more return on investment than Personel Alih. However, Royal Prima PT is 1.08 times less risky than Personel Alih. It trades about -0.03 of its potential returns per unit of risk. Personel Alih Daya is currently generating about -0.09 per unit of risk. If you would invest 15,400 in Royal Prima PT on November 28, 2024 and sell it today you would lose (9,500) from holding Royal Prima PT or give up 61.69% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 99.79% |
| Values | Daily Returns |
Royal Prima PT vs. Personel Alih Daya
Performance |
| Timeline |
| Royal Prima PT |
| Personel Alih Daya |
Royal Prima and Personel Alih Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Royal Prima and Personel Alih
The main advantage of trading using opposite Royal Prima and Personel Alih positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Royal Prima position performs unexpectedly, Personel Alih 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 Personel Alih will offset losses from the drop in Personel Alih's long position.| Royal Prima vs. Medikaloka Hermina PT | Royal Prima vs. Sejahteraraya Anugrahjaya Tbk | Royal Prima vs. Prodia Widyahusada Tbk | Royal Prima vs. Sarana Meditama Metropolitan |
| Personel Alih vs. Optima Prima Metal | Personel Alih vs. Inocycle Technology Tbk | Personel Alih vs. Eastparc Hotel Tbk | Personel Alih vs. Humpuss Intermoda Transportasi |
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 Alpha Finder module to use alpha and beta coefficients to find investment opportunities after accounting for the risk.
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