Correlation Between Putra Rajawali and Terregra Asia
Can any of the company-specific risk be diversified away by investing in both Putra Rajawali and Terregra Asia 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 Putra Rajawali and Terregra Asia into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Putra Rajawali Kencana and Terregra Asia Energy, you can compare the effects of market volatilities on Putra Rajawali and Terregra Asia 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 Putra Rajawali with a short position of Terregra Asia. Check out your portfolio center. Please also check ongoing floating volatility patterns of Putra Rajawali and Terregra Asia.
Diversification Opportunities for Putra Rajawali and Terregra Asia
0.49 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Putra and Terregra is 0.49. Overlapping area represents the amount of risk that can be diversified away by holding Putra Rajawali Kencana and Terregra Asia Energy in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Terregra Asia Energy and Putra Rajawali 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 Putra Rajawali Kencana are associated (or correlated) with Terregra Asia. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Terregra Asia Energy has no effect on the direction of Putra Rajawali i.e., Putra Rajawali and Terregra Asia go up and down completely randomly.
Pair Corralation between Putra Rajawali and Terregra Asia
Assuming the 90 days trading horizon Putra Rajawali Kencana is expected to under-perform the Terregra Asia. In addition to that, Putra Rajawali is 1.18 times more volatile than Terregra Asia Energy. It trades about -0.12 of its total potential returns per unit of risk. Terregra Asia Energy is currently generating about -0.13 per unit of volatility. If you would invest 2,900 in Terregra Asia Energy on September 12, 2024 and sell it today you would lose (900.00) from holding Terregra Asia Energy or give up 31.03% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Putra Rajawali Kencana vs. Terregra Asia Energy
Performance |
| Timeline |
| Putra Rajawali Kencana |
| Terregra Asia Energy |
Putra Rajawali and Terregra Asia Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Putra Rajawali and Terregra Asia
The main advantage of trading using opposite Putra Rajawali and Terregra Asia positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Putra Rajawali position performs unexpectedly, Terregra Asia 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 Terregra Asia will offset losses from the drop in Terregra Asia's long position.| Putra Rajawali vs. Kapuas Prima Coal | Putra Rajawali vs. Karya Bersama Anugerah | Putra Rajawali vs. Era Mandiri Cemerlang | Putra Rajawali vs. PP Presisi Tbk |
| Terregra Asia vs. Kapuas Prima Coal | Terregra Asia vs. Cikarang Listrindo Tbk | Terregra Asia vs. PP Presisi Tbk | Terregra Asia vs. Alfa Energi Investama |
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 AI Portfolio Architect module to use AI to generate optimal portfolios and find profitable investment opportunities.
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