Correlation Between Pakuwon Jati and Ciputra Development
Can any of the company-specific risk be diversified away by investing in both Pakuwon Jati and Ciputra Development 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 Pakuwon Jati and Ciputra Development into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Pakuwon Jati Tbk and Ciputra Development Tbk, you can compare the effects of market volatilities on Pakuwon Jati and Ciputra Development 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 Pakuwon Jati with a short position of Ciputra Development. Check out your portfolio center. Please also check ongoing floating volatility patterns of Pakuwon Jati and Ciputra Development.
Diversification Opportunities for Pakuwon Jati and Ciputra Development
0.88 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Pakuwon and Ciputra is 0.88. Overlapping area represents the amount of risk that can be diversified away by holding Pakuwon Jati Tbk and Ciputra Development Tbk in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Ciputra Development Tbk and Pakuwon Jati 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 Pakuwon Jati Tbk are associated (or correlated) with Ciputra Development. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Ciputra Development Tbk has no effect on the direction of Pakuwon Jati i.e., Pakuwon Jati and Ciputra Development go up and down completely randomly.
Pair Corralation between Pakuwon Jati and Ciputra Development
Assuming the 90 days trading horizon Pakuwon Jati Tbk is expected to generate 0.8 times more return on investment than Ciputra Development. However, Pakuwon Jati Tbk is 1.25 times less risky than Ciputra Development. It trades about 0.02 of its potential returns per unit of risk. Ciputra Development Tbk is currently generating about 0.0 per unit of risk. If you would invest 41,786 in Pakuwon Jati Tbk on August 24, 2024 and sell it today you would earn a total of 1,414 from holding Pakuwon Jati Tbk or generate 3.38% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Pakuwon Jati Tbk vs. Ciputra Development Tbk
Performance |
| Timeline |
| Pakuwon Jati Tbk |
| Ciputra Development Tbk |
Pakuwon Jati and Ciputra Development Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Pakuwon Jati and Ciputra Development
The main advantage of trading using opposite Pakuwon Jati and Ciputra Development positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Pakuwon Jati position performs unexpectedly, Ciputra Development 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 Ciputra Development will offset losses from the drop in Ciputra Development's long position.| Pakuwon Jati vs. Ciputra Development Tbk | Pakuwon Jati vs. Bumi Serpong Damai | Pakuwon Jati vs. Alam Sutera Realty | Pakuwon Jati vs. Lippo Karawaci Tbk |
| Ciputra Development vs. Summarecon Agung Tbk | Ciputra Development vs. Bumi Serpong Damai | Ciputra Development vs. Adhi Karya Persero | Ciputra Development vs. Wijaya Karya Beton |
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 Stock Screener module to find equities using a custom stock filter or screen asymmetry in trading patterns, price, volume, or investment outlook..
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