Correlation Between Perusahaan Perseroan and SPROUTS FARMERS

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Can any of the company-specific risk be diversified away by investing in both Perusahaan Perseroan and SPROUTS FARMERS 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 Perusahaan Perseroan and SPROUTS FARMERS into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Perusahaan Perseroan PT and SPROUTS FARMERS MKT, you can compare the effects of market volatilities on Perusahaan Perseroan and SPROUTS FARMERS 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 Perusahaan Perseroan with a short position of SPROUTS FARMERS. Check out your portfolio center. Please also check ongoing floating volatility patterns of Perusahaan Perseroan and SPROUTS FARMERS.

Diversification Opportunities for Perusahaan Perseroan and SPROUTS FARMERS

-0.54
  Correlation Coefficient

Excellent diversification

The 3 months correlation between Perusahaan and SPROUTS is -0.54. Overlapping area represents the amount of risk that can be diversified away by holding Perusahaan Perseroan PT and SPROUTS FARMERS MKT in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on SPROUTS FARMERS MKT and Perusahaan Perseroan 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 Perusahaan Perseroan PT are associated (or correlated) with SPROUTS FARMERS. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of SPROUTS FARMERS MKT has no effect on the direction of Perusahaan Perseroan i.e., Perusahaan Perseroan and SPROUTS FARMERS go up and down completely randomly.

Pair Corralation between Perusahaan Perseroan and SPROUTS FARMERS

Assuming the 90 days horizon Perusahaan Perseroan PT is expected to under-perform the SPROUTS FARMERS. In addition to that, Perusahaan Perseroan is 1.21 times more volatile than SPROUTS FARMERS MKT. It trades about -0.02 of its total potential returns per unit of risk. SPROUTS FARMERS MKT is currently generating about 0.0 per unit of volatility. If you would invest  13,650  in SPROUTS FARMERS MKT on October 16, 2024 and sell it today you would lose (50.00) from holding SPROUTS FARMERS MKT or give up 0.37% of portfolio value over 90 days.
Time Period3 Months [change]
DirectionMoves Against 
StrengthVery Weak
Accuracy100.0%
ValuesDaily Returns

Perusahaan Perseroan PT  vs.  SPROUTS FARMERS MKT

 Performance 
       Timeline  
Perusahaan Perseroan 

Risk-Adjusted Performance

0 of 100

 
Weak
 
Strong
Very Weak
Over the last 90 days Perusahaan Perseroan PT has generated negative risk-adjusted returns adding no value to investors with long positions. Despite nearly stable basic indicators, Perusahaan Perseroan is not utilizing all of its potentials. The current stock price disturbance, may contribute to mid-run losses for the stockholders.
SPROUTS FARMERS MKT 

Risk-Adjusted Performance

13 of 100

 
Weak
 
Strong
Good
Compared to the overall equity markets, risk-adjusted returns on investments in SPROUTS FARMERS MKT are ranked lower than 13 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively uncertain basic indicators, SPROUTS FARMERS unveiled solid returns over the last few months and may actually be approaching a breakup point.

Perusahaan Perseroan and SPROUTS FARMERS Volatility Contrast

   Predicted Return Density   
       Returns  

Pair Trading with Perusahaan Perseroan and SPROUTS FARMERS

The main advantage of trading using opposite Perusahaan Perseroan and SPROUTS FARMERS positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Perusahaan Perseroan position performs unexpectedly, SPROUTS FARMERS 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 SPROUTS FARMERS will offset losses from the drop in SPROUTS FARMERS's long position.
The idea behind Perusahaan Perseroan PT and SPROUTS FARMERS MKT pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.
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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 Center module to all portfolio management and optimization tools to improve performance of your portfolios.

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