Correlation Between Sumber Mas and PP Presisi
Can any of the company-specific risk be diversified away by investing in both Sumber Mas and PP Presisi 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 Sumber Mas and PP Presisi into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Sumber Mas Konstruksi and PP Presisi Tbk, you can compare the effects of market volatilities on Sumber Mas and PP Presisi 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 Sumber Mas with a short position of PP Presisi. Check out your portfolio center. Please also check ongoing floating volatility patterns of Sumber Mas and PP Presisi.
Diversification Opportunities for Sumber Mas and PP Presisi
0.63 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Sumber and PPRE is 0.63. Overlapping area represents the amount of risk that can be diversified away by holding Sumber Mas Konstruksi and PP Presisi Tbk in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on PP Presisi Tbk and Sumber Mas 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 Sumber Mas Konstruksi are associated (or correlated) with PP Presisi. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of PP Presisi Tbk has no effect on the direction of Sumber Mas i.e., Sumber Mas and PP Presisi go up and down completely randomly.
Pair Corralation between Sumber Mas and PP Presisi
Assuming the 90 days trading horizon Sumber Mas Konstruksi is expected to under-perform the PP Presisi. In addition to that, Sumber Mas is 1.43 times more volatile than PP Presisi Tbk. It trades about -0.23 of its total potential returns per unit of risk. PP Presisi Tbk is currently generating about -0.03 per unit of volatility. If you would invest 5,900 in PP Presisi Tbk on November 3, 2024 and sell it today you would lose (300.00) from holding PP Presisi Tbk or give up 5.08% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 97.37% |
| Values | Daily Returns |
Sumber Mas Konstruksi vs. PP Presisi Tbk
Performance |
| Timeline |
| Sumber Mas Konstruksi |
| PP Presisi Tbk |
Sumber Mas and PP Presisi Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Sumber Mas and PP Presisi
The main advantage of trading using opposite Sumber Mas and PP Presisi positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Sumber Mas position performs unexpectedly, PP Presisi 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 PP Presisi will offset losses from the drop in PP Presisi's long position.| Sumber Mas vs. Wahana Inti MakmurTbk | Sumber Mas vs. Sumber Tani Agung | Sumber Mas vs. Nanotech Indonesia Global | Sumber Mas vs. RMK Energy PT |
| PP Presisi vs. Wijaya Karya Bangunan | PP Presisi vs. PP Properti Tbk | PP Presisi vs. Wijaya Karya Beton | PP Presisi vs. Soechi Lines 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 AI Portfolio Architect module to use AI to generate optimal portfolios and find profitable investment opportunities.
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