Correlation Between Repower Asia and Putra Rajawali
Can any of the company-specific risk be diversified away by investing in both Repower Asia and Putra Rajawali 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 Repower Asia and Putra Rajawali into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Repower Asia Indonesia and Putra Rajawali Kencana, you can compare the effects of market volatilities on Repower Asia and Putra Rajawali 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 Repower Asia with a short position of Putra Rajawali. Check out your portfolio center. Please also check ongoing floating volatility patterns of Repower Asia and Putra Rajawali.
Diversification Opportunities for Repower Asia and Putra Rajawali
0.43 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Repower and Putra is 0.43. Overlapping area represents the amount of risk that can be diversified away by holding Repower Asia Indonesia and Putra Rajawali Kencana in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Putra Rajawali Kencana and Repower Asia 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 Repower Asia Indonesia are associated (or correlated) with Putra Rajawali. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Putra Rajawali Kencana has no effect on the direction of Repower Asia i.e., Repower Asia and Putra Rajawali go up and down completely randomly.
Pair Corralation between Repower Asia and Putra Rajawali
Assuming the 90 days trading horizon Repower Asia Indonesia is expected to generate 1.58 times more return on investment than Putra Rajawali. However, Repower Asia is 1.58 times more volatile than Putra Rajawali Kencana. It trades about 0.06 of its potential returns per unit of risk. Putra Rajawali Kencana is currently generating about -0.06 per unit of risk. If you would invest 700.00 in Repower Asia Indonesia on November 3, 2024 and sell it today you would earn a total of 300.00 from holding Repower Asia Indonesia or generate 42.86% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Repower Asia Indonesia vs. Putra Rajawali Kencana
Performance |
| Timeline |
| Repower Asia Indonesia |
| Putra Rajawali Kencana |
Repower Asia and Putra Rajawali Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Repower Asia and Putra Rajawali
The main advantage of trading using opposite Repower Asia and Putra Rajawali positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Repower Asia position performs unexpectedly, Putra Rajawali 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 Putra Rajawali will offset losses from the drop in Putra Rajawali's long position.| Repower Asia vs. FKS Food Sejahtera | Repower Asia vs. PT Charlie Hospital | Repower Asia vs. Sentra Food Indonesia | Repower Asia vs. PT Wahana Interfood |
| Putra Rajawali vs. Kapuas Prima Coal | Putra Rajawali vs. Karya Bersama Anugerah | Putra Rajawali vs. Era Mandiri Cemerlang | Putra Rajawali vs. PP Presisi Tbk |
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 Portfolio Analyzer module to portfolio analysis module that provides access to portfolio diagnostics and optimization engine.
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