Correlation Between Shield On and Royal Prima
Can any of the company-specific risk be diversified away by investing in both Shield On and Royal Prima 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 Shield On and Royal Prima into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Shield On Service and Royal Prima PT, you can compare the effects of market volatilities on Shield On and Royal Prima 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 Shield On with a short position of Royal Prima. Check out your portfolio center. Please also check ongoing floating volatility patterns of Shield On and Royal Prima.
Diversification Opportunities for Shield On and Royal Prima
-0.26 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Shield and Royal is -0.26. Overlapping area represents the amount of risk that can be diversified away by holding Shield On Service and Royal Prima PT in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Royal Prima PT and Shield On 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 Shield On Service are associated (or correlated) with Royal Prima. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Royal Prima PT has no effect on the direction of Shield On i.e., Shield On and Royal Prima go up and down completely randomly.
Pair Corralation between Shield On and Royal Prima
Assuming the 90 days trading horizon Shield On Service is expected to generate 4.52 times more return on investment than Royal Prima. However, Shield On is 4.52 times more volatile than Royal Prima PT. It trades about 0.15 of its potential returns per unit of risk. Royal Prima PT is currently generating about -0.14 per unit of risk. If you would invest 45,000 in Shield On Service on August 30, 2024 and sell it today you would earn a total of 22,500 from holding Shield On Service or generate 50.0% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Shield On Service vs. Royal Prima PT
Performance |
| Timeline |
| Shield On Service |
| Royal Prima PT |
Shield On and Royal Prima Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Shield On and Royal Prima
The main advantage of trading using opposite Shield On and Royal Prima positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Shield On position performs unexpectedly, Royal Prima 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 Royal Prima will offset losses from the drop in Royal Prima's long position.| Shield On vs. PT Surya Pertiwi | Shield On vs. Satria Mega Kencana | Shield On vs. Multifiling Mitra Indonesia | Shield On vs. Royal Prima PT |
| Royal Prima vs. Merdeka Copper Gold | Royal Prima vs. Tower Bersama Infrastructure | Royal Prima vs. Erajaya Swasembada Tbk | Royal Prima vs. Surya Citra Media |
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 Price Transformation module to use Price Transformation models to analyze the depth of different equity instruments across global markets.
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