Correlation Between Pelayaran Nelly and Batavia Prosperindo

Can any of the company-specific risk be diversified away by investing in both Pelayaran Nelly and Batavia Prosperindo 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 Pelayaran Nelly and Batavia Prosperindo into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Pelayaran Nelly Dwi and Batavia Prosperindo Trans, you can compare the effects of market volatilities on Pelayaran Nelly and Batavia Prosperindo 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 Pelayaran Nelly with a short position of Batavia Prosperindo. Check out your portfolio center. Please also check ongoing floating volatility patterns of Pelayaran Nelly and Batavia Prosperindo.

Diversification Opportunities for Pelayaran Nelly and Batavia Prosperindo

0.61

Correlation Coefficient

Pelayaran Nelly  Batavia Prosperindo

Poor diversification

The 3 months correlation between Pelayaran and Batavia is 0.61. Overlapping area represents the amount of risk that can be diversified away by holding Pelayaran Nelly Dwi and Batavia Prosperindo Trans in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Batavia Prosperindo Trans and Pelayaran Nelly 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 Pelayaran Nelly Dwi are associated (or correlated) with Batavia Prosperindo. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Batavia Prosperindo Trans has no effect on the direction of Pelayaran Nelly i.e., Pelayaran Nelly and Batavia Prosperindo go up and down completely randomly.

Pair Corralation between Pelayaran Nelly and Batavia Prosperindo

Assuming the 90 days trading horizon Pelayaran Nelly Dwi is expected to generate 0.62 times more return on investment than Batavia Prosperindo. However, Pelayaran Nelly Dwi is 1.62 times less risky than Batavia Prosperindo. It trades about -0.07 of its potential returns per unit of risk. Batavia Prosperindo Trans is currently generating about -0.14 per unit of risk. If you would invest  46,200  in Pelayaran Nelly Dwi on September 30, 2024 and sell it today you would lose (2,200) from holding Pelayaran Nelly Dwi or give up 4.76% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Significant
Accuracy	100.0%
Values	Daily Returns

Pelayaran Nelly Dwi  vs.  Batavia Prosperindo Trans

Pelayaran Nelly Dwi

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Pelayaran Nelly Dwi has generated negative risk-adjusted returns adding no value to investors with long positions. Despite quite persistent forward-looking signals, Pelayaran Nelly is not utilizing all of its potentials. The latest stock price mess, may contribute to short-term losses for the institutional investors.

Batavia Prosperindo Trans

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Batavia Prosperindo Trans has generated negative risk-adjusted returns adding no value to investors with long positions. Despite conflicting performance in the last few months, the Stock's forward-looking signals remain quite persistent which may send shares a bit higher in January 2025. The latest mess may also be a sign of long-standing up-swing for the company institutional investors.

Pair Trading with Pelayaran Nelly and Batavia Prosperindo

The main advantage of trading using opposite Pelayaran Nelly and Batavia Prosperindo positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Pelayaran Nelly position performs unexpectedly, Batavia Prosperindo 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 Batavia Prosperindo will offset losses from the drop in Batavia Prosperindo's long position.

The idea behind Pelayaran Nelly Dwi and Batavia Prosperindo Trans pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.

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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 Positions Ratings module to determine portfolio positions ratings based on digital equity recommendations. Macroaxis instant position ratings are based on combination of fundamental analysis and risk-adjusted market performance.