Correlation Between Pratama Widya and Pt Pakuan
Can any of the company-specific risk be diversified away by investing in both Pratama Widya and Pt Pakuan 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 Pratama Widya and Pt Pakuan into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Pratama Widya Tbk and Pt Pakuan Tbk, you can compare the effects of market volatilities on Pratama Widya and Pt Pakuan 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 Pratama Widya with a short position of Pt Pakuan. Check out your portfolio center. Please also check ongoing floating volatility patterns of Pratama Widya and Pt Pakuan.
Diversification Opportunities for Pratama Widya and Pt Pakuan
-0.16 | Correlation Coefficient |
Good diversification
The 3 months correlation between Pratama and UANG is -0.16. Overlapping area represents the amount of risk that can be diversified away by holding Pratama Widya Tbk and Pt Pakuan Tbk in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Pt Pakuan Tbk and Pratama Widya 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 Pratama Widya Tbk are associated (or correlated) with Pt Pakuan. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Pt Pakuan Tbk has no effect on the direction of Pratama Widya i.e., Pratama Widya and Pt Pakuan go up and down completely randomly.
Pair Corralation between Pratama Widya and Pt Pakuan
Assuming the 90 days trading horizon Pratama Widya Tbk is expected to under-perform the Pt Pakuan. But the stock apears to be less risky and, when comparing its historical volatility, Pratama Widya Tbk is 8.02 times less risky than Pt Pakuan. The stock trades about -0.04 of its potential returns per unit of risk. The Pt Pakuan Tbk is currently generating about 0.06 of returns per unit of risk over similar time horizon. If you would invest 33,436 in Pt Pakuan Tbk on September 12, 2024 and sell it today you would earn a total of 40,064 from holding Pt Pakuan Tbk or generate 119.82% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 99.72% |
| Values | Daily Returns |
Pratama Widya Tbk vs. Pt Pakuan Tbk
Performance |
| Timeline |
| Pratama Widya Tbk |
| Pt Pakuan Tbk |
Pratama Widya and Pt Pakuan Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Pratama Widya and Pt Pakuan
The main advantage of trading using opposite Pratama Widya and Pt Pakuan positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Pratama Widya position performs unexpectedly, Pt Pakuan 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 Pakuan will offset losses from the drop in Pt Pakuan's long position.| Pratama Widya vs. Kencana Energi Lestari | Pratama Widya vs. Pelita Samudera Shipping | Pratama Widya vs. Paramita Bangun Sarana | Pratama Widya vs. Dana Brata Luhur |
| Pt Pakuan vs. Perintis Triniti Properti | Pt Pakuan vs. Satria Mega Kencana | Pt Pakuan vs. Sunindo Adipersada Tbk | Pt Pakuan vs. Jaya Sukses Makmur |
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 Sign In To Macroaxis module to sign in to explore Macroaxis' wealth optimization platform and fintech modules.
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