Correlation Between Pt Pakuan and Krida Jaringan
Can any of the company-specific risk be diversified away by investing in both Pt Pakuan and Krida Jaringan 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 Pt Pakuan and Krida Jaringan into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Pt Pakuan Tbk and Krida Jaringan Nusantara, you can compare the effects of market volatilities on Pt Pakuan and Krida Jaringan 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 Pt Pakuan with a short position of Krida Jaringan. Check out your portfolio center. Please also check ongoing floating volatility patterns of Pt Pakuan and Krida Jaringan.
Diversification Opportunities for Pt Pakuan and Krida Jaringan
0.66 | Correlation Coefficient |
Poor diversification
The 3 months correlation between UANG and Krida is 0.66. Overlapping area represents the amount of risk that can be diversified away by holding Pt Pakuan Tbk and Krida Jaringan Nusantara in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Krida Jaringan Nusantara and Pt Pakuan 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 Pt Pakuan Tbk are associated (or correlated) with Krida Jaringan. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Krida Jaringan Nusantara has no effect on the direction of Pt Pakuan i.e., Pt Pakuan and Krida Jaringan go up and down completely randomly.
Pair Corralation between Pt Pakuan and Krida Jaringan
Assuming the 90 days trading horizon Pt Pakuan Tbk is expected to generate 1.36 times more return on investment than Krida Jaringan. However, Pt Pakuan is 1.36 times more volatile than Krida Jaringan Nusantara. It trades about 0.03 of its potential returns per unit of risk. Krida Jaringan Nusantara is currently generating about -0.02 per unit of risk. If you would invest 85,557 in Pt Pakuan Tbk on August 27, 2024 and sell it today you would lose (12,057) from holding Pt Pakuan Tbk or give up 14.09% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 99.58% |
| Values | Daily Returns |
Pt Pakuan Tbk vs. Krida Jaringan Nusantara
Performance |
| Timeline |
| Pt Pakuan Tbk |
| Krida Jaringan Nusantara |
Pt Pakuan and Krida Jaringan Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Pt Pakuan and Krida Jaringan
The main advantage of trading using opposite Pt Pakuan and Krida Jaringan positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Pt Pakuan position performs unexpectedly, Krida Jaringan 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 Krida Jaringan will offset losses from the drop in Krida Jaringan's long position.| Pt Pakuan vs. Perintis Triniti Properti | Pt Pakuan vs. Satria Mega Kencana | Pt Pakuan vs. Sunindo Adipersada Tbk | Pt Pakuan vs. Jaya Sukses Makmur |
| Krida Jaringan vs. PT Trimuda Nuansa | Krida Jaringan vs. Satria Antaran Prima | Krida Jaringan vs. Guna Timur Raya | Krida Jaringan vs. Kioson Komersial Indonesia |
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 Alpha Finder module to use alpha and beta coefficients to find investment opportunities after accounting for the risk.
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