Correlation Between PT Charlie and PT Janu
Can any of the company-specific risk be diversified away by investing in both PT Charlie and PT Janu 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 PT Charlie and PT Janu into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between PT Charlie Hospital and PT Janu Putra, you can compare the effects of market volatilities on PT Charlie and PT Janu 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 PT Charlie with a short position of PT Janu. Check out your portfolio center. Please also check ongoing floating volatility patterns of PT Charlie and PT Janu.
Diversification Opportunities for PT Charlie and PT Janu
-0.53 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between RSCH and AYAM is -0.53. Overlapping area represents the amount of risk that can be diversified away by holding PT Charlie Hospital and PT Janu Putra in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on PT Janu Putra and PT Charlie 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 PT Charlie Hospital are associated (or correlated) with PT Janu. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of PT Janu Putra has no effect on the direction of PT Charlie i.e., PT Charlie and PT Janu go up and down completely randomly.
Pair Corralation between PT Charlie and PT Janu
Assuming the 90 days trading horizon PT Charlie Hospital is expected to under-perform the PT Janu. But the stock apears to be less risky and, when comparing its historical volatility, PT Charlie Hospital is 1.99 times less risky than PT Janu. The stock trades about -0.2 of its potential returns per unit of risk. The PT Janu Putra is currently generating about 0.27 of returns per unit of risk over similar time horizon. If you would invest 11,700 in PT Janu Putra on September 12, 2024 and sell it today you would earn a total of 3,300 from holding PT Janu Putra or generate 28.21% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
PT Charlie Hospital vs. PT Janu Putra
Performance |
| Timeline |
| PT Charlie Hospital |
| PT Janu Putra |
PT Charlie and PT Janu Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with PT Charlie and PT Janu
The main advantage of trading using opposite PT Charlie and PT Janu positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if PT Charlie position performs unexpectedly, PT Janu 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 Janu will offset losses from the drop in PT Janu's long position.| PT Charlie vs. Bank Central Asia | PT Charlie vs. Bank Rakyat Indonesia | PT Charlie vs. Bayan Resources Tbk | PT Charlie vs. Bank Mandiri Persero |
| PT Janu vs. Enseval Putra Megatrading | PT Janu vs. Ciptadana Asset Management | PT Janu vs. Equity Development Investment | PT Janu vs. Gunawan Dianjaya Steel |
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 Center module to all portfolio management and optimization tools to improve performance of your portfolios.
Other Complementary Tools
| Equity Forecasting Use basic forecasting models to generate price predictions and determine price momentum | |
| Portfolio Volatility Check portfolio volatility and analyze historical return density to properly model market risk | |
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| Fundamentals Comparison Compare fundamentals across multiple equities to find investing opportunities | |
| Portfolio Backtesting Avoid under-diversification and over-optimization by backtesting your portfolios |