Correlation Between PT Semen and Newpark Resources
Can any of the company-specific risk be diversified away by investing in both PT Semen and Newpark Resources 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 PT Semen and Newpark Resources into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between PT Semen Indonesia and Newpark Resources, you can compare the effects of market volatilities on PT Semen and Newpark Resources 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 PT Semen with a short position of Newpark Resources. Check out your portfolio center. Please also check ongoing floating volatility patterns of PT Semen and Newpark Resources.
Diversification Opportunities for PT Semen and Newpark Resources
-0.73 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between PSGTF and Newpark is -0.73. Overlapping area represents the amount of risk that can be diversified away by holding PT Semen Indonesia and Newpark Resources in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Newpark Resources and PT Semen 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 PT Semen Indonesia are associated (or correlated) with Newpark Resources. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Newpark Resources has no effect on the direction of PT Semen i.e., PT Semen and Newpark Resources go up and down completely randomly.
Pair Corralation between PT Semen and Newpark Resources
If you would invest 23.00 in PT Semen Indonesia on October 9, 2024 and sell it today you would earn a total of 0.00 from holding PT Semen Indonesia or generate 0.0% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 52.63% |
| Values | Daily Returns |
PT Semen Indonesia vs. Newpark Resources
Performance |
| Timeline |
| PT Semen Indonesia |
| Newpark Resources |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Weak
PT Semen and Newpark Resources Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with PT Semen and Newpark Resources
The main advantage of trading using opposite PT Semen and Newpark Resources positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if PT Semen position performs unexpectedly, Newpark Resources 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 Newpark Resources will offset losses from the drop in Newpark Resources' long position.| PT Semen vs. Tritent International Agriculture | PT Semen vs. Parker Hannifin | PT Semen vs. Shake Shack | PT Semen vs. RCI Hospitality Holdings |
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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 Portfolio Dashboard module to portfolio dashboard that provides centralized access to all your investments.
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