Correlation Between PT United and CarsalesCom
Can any of the company-specific risk be diversified away by investing in both PT United and CarsalesCom 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 United and CarsalesCom into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between PT United Tractors and CarsalesCom, you can compare the effects of market volatilities on PT United and CarsalesCom 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 United with a short position of CarsalesCom. Check out your portfolio center. Please also check ongoing floating volatility patterns of PT United and CarsalesCom.
Diversification Opportunities for PT United and CarsalesCom
0.37 | Correlation Coefficient |
Weak diversification
The 3 months correlation between UTY and CarsalesCom is 0.37. Overlapping area represents the amount of risk that can be diversified away by holding PT United Tractors and CarsalesCom in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on CarsalesCom and PT United 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 United Tractors are associated (or correlated) with CarsalesCom. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of CarsalesCom has no effect on the direction of PT United i.e., PT United and CarsalesCom go up and down completely randomly.
Pair Corralation between PT United and CarsalesCom
Assuming the 90 days horizon PT United Tractors is expected to generate 1.04 times more return on investment than CarsalesCom. However, PT United is 1.04 times more volatile than CarsalesCom. It trades about 0.29 of its potential returns per unit of risk. CarsalesCom is currently generating about 0.06 per unit of risk. If you would invest 147.00 in PT United Tractors on September 12, 2024 and sell it today you would earn a total of 13.00 from holding PT United Tractors or generate 8.84% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
PT United Tractors vs. CarsalesCom
Performance |
| Timeline |
| PT United Tractors |
| CarsalesCom |
PT United and CarsalesCom Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with PT United and CarsalesCom
The main advantage of trading using opposite PT United and CarsalesCom positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if PT United position performs unexpectedly, CarsalesCom 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 CarsalesCom will offset losses from the drop in CarsalesCom's long position.| PT United vs. MACOM Technology Solutions | PT United vs. Computer And Technologies | PT United vs. SMA Solar Technology | PT United vs. DXC Technology Co |
| CarsalesCom vs. Tencent Holdings | CarsalesCom vs. Superior Plus Corp | CarsalesCom vs. SIVERS SEMICONDUCTORS AB | CarsalesCom vs. NorAm Drilling AS |
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 Piotroski F Score module to get Piotroski F Score based on the binary analysis strategy of nine different fundamentals.
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