Correlation Between Kapuas Prima and Putra Rajawali
Can any of the company-specific risk be diversified away by investing in both Kapuas Prima and Putra Rajawali 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 Kapuas Prima and Putra Rajawali into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Kapuas Prima Coal and Putra Rajawali Kencana, you can compare the effects of market volatilities on Kapuas Prima and Putra Rajawali 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 Kapuas Prima with a short position of Putra Rajawali. Check out your portfolio center. Please also check ongoing floating volatility patterns of Kapuas Prima and Putra Rajawali.
Diversification Opportunities for Kapuas Prima and Putra Rajawali
0.52 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Kapuas and Putra is 0.52. Overlapping area represents the amount of risk that can be diversified away by holding Kapuas Prima Coal and Putra Rajawali Kencana in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Putra Rajawali Kencana and Kapuas Prima 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 Kapuas Prima Coal are associated (or correlated) with Putra Rajawali. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Putra Rajawali Kencana has no effect on the direction of Kapuas Prima i.e., Kapuas Prima and Putra Rajawali go up and down completely randomly.
Pair Corralation between Kapuas Prima and Putra Rajawali
Assuming the 90 days trading horizon Kapuas Prima Coal is expected to under-perform the Putra Rajawali. But the stock apears to be less risky and, when comparing its historical volatility, Kapuas Prima Coal is 1.8 times less risky than Putra Rajawali. The stock trades about -0.38 of its potential returns per unit of risk. The Putra Rajawali Kencana is currently generating about -0.05 of returns per unit of risk over similar time horizon. If you would invest 1,300 in Putra Rajawali Kencana on November 28, 2024 and sell it today you would lose (100.00) from holding Putra Rajawali Kencana or give up 7.69% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Kapuas Prima Coal vs. Putra Rajawali Kencana
Performance |
| Timeline |
| Kapuas Prima Coal |
| Putra Rajawali Kencana |
Kapuas Prima and Putra Rajawali Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Kapuas Prima and Putra Rajawali
The main advantage of trading using opposite Kapuas Prima and Putra Rajawali positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Kapuas Prima position performs unexpectedly, Putra Rajawali 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 Putra Rajawali will offset losses from the drop in Putra Rajawali's long position.| Kapuas Prima vs. Merdeka Copper Gold | Kapuas Prima vs. J Resources Asia | Kapuas Prima vs. Central Omega Resources | Kapuas Prima vs. Puradelta Lestari PT |
| Putra Rajawali vs. Kapuas Prima Coal | Putra Rajawali vs. Karya Bersama Anugerah | Putra Rajawali vs. Era Mandiri Cemerlang | Putra Rajawali vs. PP Presisi 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 Earnings Calls module to check upcoming earnings announcements updated hourly across public exchanges.
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