Correlation Between Pakuwon Jati and Puradelta Lestari
Can any of the company-specific risk be diversified away by investing in both Pakuwon Jati and Puradelta Lestari 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 Puradelta Lestari 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 Puradelta Lestari PT, you can compare the effects of market volatilities on Pakuwon Jati and Puradelta Lestari 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 Puradelta Lestari. Check out your portfolio center. Please also check ongoing floating volatility patterns of Pakuwon Jati and Puradelta Lestari.
Diversification Opportunities for Pakuwon Jati and Puradelta Lestari
0.85 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Pakuwon and Puradelta is 0.85. Overlapping area represents the amount of risk that can be diversified away by holding Pakuwon Jati Tbk and Puradelta Lestari PT in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Puradelta Lestari 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 Puradelta Lestari. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Puradelta Lestari has no effect on the direction of Pakuwon Jati i.e., Pakuwon Jati and Puradelta Lestari go up and down completely randomly.
Pair Corralation between Pakuwon Jati and Puradelta Lestari
Assuming the 90 days trading horizon Pakuwon Jati Tbk is expected to generate 2.82 times more return on investment than Puradelta Lestari. However, Pakuwon Jati is 2.82 times more volatile than Puradelta Lestari PT. It trades about 0.07 of its potential returns per unit of risk. Puradelta Lestari PT is currently generating about -0.06 per unit of risk. If you would invest 38,800 in Pakuwon Jati Tbk on October 21, 2024 and sell it today you would earn a total of 800.00 from holding Pakuwon Jati Tbk or generate 2.06% 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. Puradelta Lestari PT
Performance |
| Timeline |
| Pakuwon Jati Tbk |
| Puradelta Lestari |
Pakuwon Jati and Puradelta Lestari Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Pakuwon Jati and Puradelta Lestari
The main advantage of trading using opposite Pakuwon Jati and Puradelta Lestari positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Pakuwon Jati position performs unexpectedly, Puradelta Lestari 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 Puradelta Lestari will offset losses from the drop in Puradelta Lestari's long position.| Pakuwon Jati vs. Bumi Serpong Damai | Pakuwon Jati vs. Ciputra Development Tbk | Pakuwon Jati vs. Summarecon Agung Tbk | Pakuwon Jati vs. Pembangunan Perumahan PT |
| Puradelta Lestari vs. Pakuwon Jati Tbk | Puradelta Lestari vs. Sido Muncul PT | Puradelta Lestari vs. Bekasi Fajar Industrial | Puradelta Lestari vs. Bank Pembangunan Timur |
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 Global Markets Map module to get a quick overview of global market snapshot using zoomable world map. Drill down to check world indexes.
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