Correlation Between Terregra Asia and Puradelta Lestari
Can any of the company-specific risk be diversified away by investing in both Terregra Asia and Puradelta Lestari 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 Terregra Asia and Puradelta Lestari into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Terregra Asia Energy and Puradelta Lestari PT, you can compare the effects of market volatilities on Terregra Asia and Puradelta Lestari 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 Terregra Asia with a short position of Puradelta Lestari. Check out your portfolio center. Please also check ongoing floating volatility patterns of Terregra Asia and Puradelta Lestari.
Diversification Opportunities for Terregra Asia and Puradelta Lestari
-0.76 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Terregra and Puradelta is -0.76. Overlapping area represents the amount of risk that can be diversified away by holding Terregra Asia Energy and Puradelta Lestari PT in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Puradelta Lestari and Terregra Asia 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 Terregra Asia Energy are associated (or correlated) with Puradelta Lestari. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Puradelta Lestari has no effect on the direction of Terregra Asia i.e., Terregra Asia and Puradelta Lestari go up and down completely randomly.
Pair Corralation between Terregra Asia and Puradelta Lestari
Assuming the 90 days trading horizon Terregra Asia Energy is expected to generate 10.11 times more return on investment than Puradelta Lestari. However, Terregra Asia is 10.11 times more volatile than Puradelta Lestari PT. It trades about 0.4 of its potential returns per unit of risk. Puradelta Lestari PT is currently generating about -0.19 per unit of risk. If you would invest 3,400 in Terregra Asia Energy on November 2, 2024 and sell it today you would earn a total of 1,600 from holding Terregra Asia Energy or generate 47.06% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Terregra Asia Energy vs. Puradelta Lestari PT
Performance |
| Timeline |
| Terregra Asia Energy |
| Puradelta Lestari |
Terregra Asia and Puradelta Lestari Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Terregra Asia and Puradelta Lestari
The main advantage of trading using opposite Terregra Asia and Puradelta Lestari positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Terregra Asia position performs unexpectedly, Puradelta Lestari 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 Puradelta Lestari will offset losses from the drop in Puradelta Lestari's long position.| Terregra Asia vs. Puradelta Lestari PT | Terregra Asia vs. Mitra Pinasthika Mustika | Terregra Asia vs. Wijaya Karya Bangunan | Terregra Asia vs. PT Sarana Menara |
| Puradelta Lestari vs. Pakuwon Jati Tbk | Puradelta Lestari vs. Sido Muncul PT | Puradelta Lestari vs. Bekasi Fajar Industrial | Puradelta Lestari vs. Bank Pembangunan Timur |
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 Financial Widgets module to easily integrated Macroaxis content with over 30 different plug-and-play financial widgets.
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