Correlation Between Pt Pakuan and Sriwahana
Can any of the company-specific risk be diversified away by investing in both Pt Pakuan and Sriwahana 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 Sriwahana 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 Sriwahana, you can compare the effects of market volatilities on Pt Pakuan and Sriwahana 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 Sriwahana. Check out your portfolio center. Please also check ongoing floating volatility patterns of Pt Pakuan and Sriwahana.
Diversification Opportunities for Pt Pakuan and Sriwahana
Poor diversification
The 3 months correlation between UANG and Sriwahana is 0.79. Overlapping area represents the amount of risk that can be diversified away by holding Pt Pakuan Tbk and Sriwahana in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Sriwahana 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 Sriwahana. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Sriwahana has no effect on the direction of Pt Pakuan i.e., Pt Pakuan and Sriwahana go up and down completely randomly.
Pair Corralation between Pt Pakuan and Sriwahana
Assuming the 90 days trading horizon Pt Pakuan Tbk is expected to under-perform the Sriwahana. But the stock apears to be less risky and, when comparing its historical volatility, Pt Pakuan Tbk is 1.27 times less risky than Sriwahana. The stock trades about -0.07 of its potential returns per unit of risk. The Sriwahana is currently generating about 0.15 of returns per unit of risk over similar time horizon. If you would invest 1,500 in Sriwahana on December 10, 2024 and sell it today you would earn a total of 200.00 from holding Sriwahana or generate 13.33% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Pt Pakuan Tbk vs. Sriwahana
Performance |
| Timeline |
| Pt Pakuan Tbk |
| Sriwahana |
Pt Pakuan and Sriwahana Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Pt Pakuan and Sriwahana
The main advantage of trading using opposite Pt Pakuan and Sriwahana positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Pt Pakuan position performs unexpectedly, Sriwahana 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 Sriwahana will offset losses from the drop in Sriwahana's long position.| Pt Pakuan vs. Perintis Triniti Properti | ||
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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 Correlation Analysis module to reduce portfolio risk simply by holding instruments which are not perfectly correlated.
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