Correlation Between Radiant Utama and Perdana Karya
Can any of the company-specific risk be diversified away by investing in both Radiant Utama and Perdana Karya 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 Radiant Utama and Perdana Karya into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Radiant Utama Interinsco and Perdana Karya Perkasa, you can compare the effects of market volatilities on Radiant Utama and Perdana Karya 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 Radiant Utama with a short position of Perdana Karya. Check out your portfolio center. Please also check ongoing floating volatility patterns of Radiant Utama and Perdana Karya.
Diversification Opportunities for Radiant Utama and Perdana Karya
-0.09 | Correlation Coefficient |
Good diversification
The 3 months correlation between Radiant and Perdana is -0.09. Overlapping area represents the amount of risk that can be diversified away by holding Radiant Utama Interinsco and Perdana Karya Perkasa in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Perdana Karya Perkasa and Radiant Utama 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 Radiant Utama Interinsco are associated (or correlated) with Perdana Karya. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Perdana Karya Perkasa has no effect on the direction of Radiant Utama i.e., Radiant Utama and Perdana Karya go up and down completely randomly.
Pair Corralation between Radiant Utama and Perdana Karya
Assuming the 90 days trading horizon Radiant Utama is expected to generate 20.41 times less return on investment than Perdana Karya. But when comparing it to its historical volatility, Radiant Utama Interinsco is 1.06 times less risky than Perdana Karya. It trades about 0.01 of its potential returns per unit of risk. Perdana Karya Perkasa is currently generating about 0.1 of returns per unit of risk over similar time horizon. If you would invest 30,800 in Perdana Karya Perkasa on August 28, 2024 and sell it today you would earn a total of 50,200 from holding Perdana Karya Perkasa or generate 162.99% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 99.71% |
| Values | Daily Returns |
Radiant Utama Interinsco vs. Perdana Karya Perkasa
Performance |
| Timeline |
| Radiant Utama Interinsco |
| Perdana Karya Perkasa |
Radiant Utama and Perdana Karya Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Radiant Utama and Perdana Karya
The main advantage of trading using opposite Radiant Utama and Perdana Karya positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Radiant Utama position performs unexpectedly, Perdana Karya 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 Perdana Karya will offset losses from the drop in Perdana Karya's long position.The idea behind Radiant Utama Interinsco and Perdana Karya Perkasa pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.| Perdana Karya vs. Radiant Utama Interinsco | Perdana Karya vs. Resource Alam Indonesia | Perdana Karya vs. Exploitasi Energi Indonesia | Perdana Karya vs. Asia Pacific Fibers |
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 Theme Ratings module to determine theme ratings based on digital equity recommendations. Macroaxis theme ratings are based on combination of fundamental analysis and risk-adjusted market performance.
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