Correlation Between Timah Persero and Panca Budi
Can any of the company-specific risk be diversified away by investing in both Timah Persero and Panca Budi 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 Timah Persero and Panca Budi into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Timah Persero Tbk and Panca Budi Idaman, you can compare the effects of market volatilities on Timah Persero and Panca Budi 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 Timah Persero with a short position of Panca Budi. Check out your portfolio center. Please also check ongoing floating volatility patterns of Timah Persero and Panca Budi.
Diversification Opportunities for Timah Persero and Panca Budi
0.58 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Timah and Panca is 0.58. Overlapping area represents the amount of risk that can be diversified away by holding Timah Persero Tbk and Panca Budi Idaman in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Panca Budi Idaman and Timah Persero 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 Timah Persero Tbk are associated (or correlated) with Panca Budi. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Panca Budi Idaman has no effect on the direction of Timah Persero i.e., Timah Persero and Panca Budi go up and down completely randomly.
Pair Corralation between Timah Persero and Panca Budi
Assuming the 90 days trading horizon Timah Persero Tbk is expected to under-perform the Panca Budi. In addition to that, Timah Persero is 1.67 times more volatile than Panca Budi Idaman. It trades about -0.29 of its total potential returns per unit of risk. Panca Budi Idaman is currently generating about -0.01 per unit of volatility. If you would invest 52,500 in Panca Budi Idaman on September 4, 2024 and sell it today you would lose (500.00) from holding Panca Budi Idaman or give up 0.95% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 95.24% |
| Values | Daily Returns |
Timah Persero Tbk vs. Panca Budi Idaman
Performance |
| Timeline |
| Timah Persero Tbk |
| Panca Budi Idaman |
Timah Persero and Panca Budi Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Timah Persero and Panca Budi
The main advantage of trading using opposite Timah Persero and Panca Budi positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Timah Persero position performs unexpectedly, Panca Budi 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 Panca Budi will offset losses from the drop in Panca Budi's long position.| Timah Persero vs. Vale Indonesia Tbk | Timah Persero vs. Aneka Tambang Persero | Timah Persero vs. Bukit Asam Tbk | Timah Persero vs. Perusahaan Gas Negara |
| Panca Budi vs. Mitrabara Adiperdana PT | Panca Budi vs. Mark Dynamics Indonesia | Panca Budi vs. Prodia Widyahusada Tbk | Panca Budi vs. Selamat Sempurna 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 Portfolio Analyzer module to portfolio analysis module that provides access to portfolio diagnostics and optimization engine.
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