Correlation Between PAM Mineral and PT Data

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Can any of the company-specific risk be diversified away by investing in both PAM Mineral and PT Data 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 PAM Mineral and PT Data into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between PAM Mineral Tbk and PT Data Sinergitama, you can compare the effects of market volatilities on PAM Mineral and PT Data 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 PAM Mineral with a short position of PT Data. Check out your portfolio center. Please also check ongoing floating volatility patterns of PAM Mineral and PT Data.

Diversification Opportunities for PAM Mineral and PT Data

-0.22
  Correlation Coefficient

Very good diversification

The 3 months correlation between PAM and ELIT is -0.22. Overlapping area represents the amount of risk that can be diversified away by holding PAM Mineral Tbk and PT Data Sinergitama in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on PT Data Sinergitama and PAM Mineral 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 PAM Mineral Tbk are associated (or correlated) with PT Data. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of PT Data Sinergitama has no effect on the direction of PAM Mineral i.e., PAM Mineral and PT Data go up and down completely randomly.

Pair Corralation between PAM Mineral and PT Data

Assuming the 90 days trading horizon PAM Mineral Tbk is expected to generate 1.26 times more return on investment than PT Data. However, PAM Mineral is 1.26 times more volatile than PT Data Sinergitama. It trades about 0.2 of its potential returns per unit of risk. PT Data Sinergitama is currently generating about -0.21 per unit of risk. If you would invest  25,193  in PAM Mineral Tbk on September 10, 2024 and sell it today you would earn a total of  3,007  from holding PAM Mineral Tbk or generate 11.94% return on investment over 90 days.
Time Period3 Months [change]
DirectionMoves Against 
StrengthInsignificant
Accuracy100.0%
ValuesDaily Returns

PAM Mineral Tbk  vs.  PT Data Sinergitama

 Performance 
       Timeline  
PAM Mineral Tbk 

Risk-Adjusted Performance

2 of 100

 
Weak
 
Strong
Insignificant
Compared to the overall equity markets, risk-adjusted returns on investments in PAM Mineral Tbk are ranked lower than 2 (%) of all global equities and portfolios over the last 90 days. Despite quite persistent forward-looking signals, PAM Mineral is not utilizing all of its potentials. The latest stock price mess, may contribute to short-term losses for the institutional investors.
PT Data Sinergitama 

Risk-Adjusted Performance

4 of 100

 
Weak
 
Strong
Insignificant
Compared to the overall equity markets, risk-adjusted returns on investments in PT Data Sinergitama are ranked lower than 4 (%) of all global equities and portfolios over the last 90 days. Despite quite conflicting forward-looking signals, PT Data may actually be approaching a critical reversion point that can send shares even higher in January 2025.

PAM Mineral and PT Data Volatility Contrast

   Predicted Return Density   
       Returns  

Pair Trading with PAM Mineral and PT Data

The main advantage of trading using opposite PAM Mineral and PT Data positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if PAM Mineral position performs unexpectedly, PT Data 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 PT Data will offset losses from the drop in PT Data's long position.
The idea behind PAM Mineral Tbk and PT Data Sinergitama 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.
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 My Watchlist Analysis module to analyze my current watchlist and to refresh optimization strategy. Macroaxis watchlist is based on self-learning algorithm to remember stocks you like.

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