Correlation Between Satria Mega and Pt Pradiksi
Can any of the company-specific risk be diversified away by investing in both Satria Mega and Pt Pradiksi 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 Satria Mega and Pt Pradiksi into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Satria Mega Kencana and Pt Pradiksi Gunatama, you can compare the effects of market volatilities on Satria Mega and Pt Pradiksi 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 Satria Mega with a short position of Pt Pradiksi. Check out your portfolio center. Please also check ongoing floating volatility patterns of Satria Mega and Pt Pradiksi.
Diversification Opportunities for Satria Mega and Pt Pradiksi
0.06 | Correlation Coefficient |
Significant diversification
The 3 months correlation between Satria and PGUN is 0.06. Overlapping area represents the amount of risk that can be diversified away by holding Satria Mega Kencana and Pt Pradiksi Gunatama in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Pt Pradiksi Gunatama and Satria Mega 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 Satria Mega Kencana are associated (or correlated) with Pt Pradiksi. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Pt Pradiksi Gunatama has no effect on the direction of Satria Mega i.e., Satria Mega and Pt Pradiksi go up and down completely randomly.
Pair Corralation between Satria Mega and Pt Pradiksi
Assuming the 90 days trading horizon Satria Mega is expected to generate 7.49 times less return on investment than Pt Pradiksi. But when comparing it to its historical volatility, Satria Mega Kencana is 7.32 times less risky than Pt Pradiksi. It trades about 0.03 of its potential returns per unit of risk. Pt Pradiksi Gunatama is currently generating about 0.03 of returns per unit of risk over similar time horizon. If you would invest 56,500 in Pt Pradiksi Gunatama on December 9, 2024 and sell it today you would lose (1,500) from holding Pt Pradiksi Gunatama or give up 2.65% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Satria Mega Kencana vs. Pt Pradiksi Gunatama
Performance |
| Timeline |
| Satria Mega Kencana |
| Pt Pradiksi Gunatama |
Satria Mega and Pt Pradiksi Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Satria Mega and Pt Pradiksi
The main advantage of trading using opposite Satria Mega and Pt Pradiksi positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Satria Mega position performs unexpectedly, Pt Pradiksi 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 Pradiksi will offset losses from the drop in Pt Pradiksi's long position.| Satria Mega vs. Shield On Service | ||
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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 Ceiling Movement module to calculate and plot Price Ceiling Movement for different equity instruments.
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