Correlation Between Royal Prima and Sriwahana
Can any of the company-specific risk be diversified away by investing in both Royal Prima and Sriwahana 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 Sriwahana 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 Sriwahana, you can compare the effects of market volatilities on Royal Prima and Sriwahana 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 Sriwahana. Check out your portfolio center. Please also check ongoing floating volatility patterns of Royal Prima and Sriwahana.
Diversification Opportunities for Royal Prima and Sriwahana
-0.1 | Correlation Coefficient |
Good diversification
The 3 months correlation between Royal and Sriwahana is -0.1. Overlapping area represents the amount of risk that can be diversified away by holding Royal Prima PT and Sriwahana in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Sriwahana 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 Sriwahana. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Sriwahana has no effect on the direction of Royal Prima i.e., Royal Prima and Sriwahana go up and down completely randomly.
Pair Corralation between Royal Prima and Sriwahana
Assuming the 90 days trading horizon Royal Prima PT is expected to generate 0.4 times more return on investment than Sriwahana. However, Royal Prima PT is 2.53 times less risky than Sriwahana. It trades about -0.25 of its potential returns per unit of risk. Sriwahana is currently generating about -0.13 per unit of risk. If you would invest 6,500 in Royal Prima PT on September 1, 2024 and sell it today you would lose (700.00) from holding Royal Prima PT or give up 10.77% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Royal Prima PT vs. Sriwahana
Performance |
| Timeline |
| Royal Prima PT |
| Sriwahana |
Royal Prima and Sriwahana Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Royal Prima and Sriwahana
The main advantage of trading using opposite Royal Prima and Sriwahana positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Royal Prima position performs unexpectedly, Sriwahana 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 Sriwahana will offset losses from the drop in Sriwahana'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 |
| Sriwahana vs. Guna Timur Raya | Sriwahana vs. PT Trimuda Nuansa | Sriwahana vs. HK Metals Utama | Sriwahana vs. Royal Prima PT |
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 Stocks Directory module to find actively traded stocks across global markets.
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