Correlation Between Palma Serasih and Pt Pradiksi
Can any of the company-specific risk be diversified away by investing in both Palma Serasih and Pt Pradiksi 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 Palma Serasih and Pt Pradiksi into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Palma Serasih PT and Pt Pradiksi Gunatama, you can compare the effects of market volatilities on Palma Serasih and Pt Pradiksi 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 Palma Serasih with a short position of Pt Pradiksi. Check out your portfolio center. Please also check ongoing floating volatility patterns of Palma Serasih and Pt Pradiksi.
Diversification Opportunities for Palma Serasih and Pt Pradiksi
0.13 | Correlation Coefficient |
Average diversification
The 3 months correlation between Palma and PGUN is 0.13. Overlapping area represents the amount of risk that can be diversified away by holding Palma Serasih PT and Pt Pradiksi Gunatama in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Pt Pradiksi Gunatama and Palma Serasih 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 Palma Serasih PT are associated (or correlated) with Pt Pradiksi. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Pt Pradiksi Gunatama has no effect on the direction of Palma Serasih i.e., Palma Serasih and Pt Pradiksi go up and down completely randomly.
Pair Corralation between Palma Serasih and Pt Pradiksi
Assuming the 90 days trading horizon Palma Serasih PT is expected to under-perform the Pt Pradiksi. But the stock apears to be less risky and, when comparing its historical volatility, Palma Serasih PT is 1.71 times less risky than Pt Pradiksi. The stock trades about -0.01 of its potential returns per unit of risk. The Pt Pradiksi Gunatama is currently generating about 0.34 of returns per unit of risk over similar time horizon. If you would invest 42,400 in Pt Pradiksi Gunatama on October 25, 2024 and sell it today you would earn a total of 8,600 from holding Pt Pradiksi Gunatama or generate 20.28% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Palma Serasih PT vs. Pt Pradiksi Gunatama
Performance |
| Timeline |
| Palma Serasih PT |
| Pt Pradiksi Gunatama |
Palma Serasih and Pt Pradiksi Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Palma Serasih and Pt Pradiksi
The main advantage of trading using opposite Palma Serasih and Pt Pradiksi positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Palma Serasih position performs unexpectedly, Pt Pradiksi 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 Pt Pradiksi will offset losses from the drop in Pt Pradiksi's long position.| Palma Serasih vs. Mahkota Group Tbk | Palma Serasih vs. Provident Agro Tbk | Palma Serasih vs. Putra Mandiri Jembar | Palma Serasih vs. Cisadane Sawit Raya |
| Pt Pradiksi vs. Mahkota Group Tbk | Pt Pradiksi vs. Palma Serasih PT | Pt Pradiksi vs. Cisadane Sawit Raya | Pt Pradiksi vs. Diamond Food Indonesia |
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 Equity Forecasting module to use basic forecasting models to generate price predictions and determine price momentum.
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