Correlation Between Panorama Sentrawisata and Pembangunan Jaya

Can any of the company-specific risk be diversified away by investing in both Panorama Sentrawisata and Pembangunan Jaya 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 Panorama Sentrawisata and Pembangunan Jaya into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Panorama Sentrawisata Tbk and Pembangunan Jaya Ancol, you can compare the effects of market volatilities on Panorama Sentrawisata and Pembangunan Jaya 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 Panorama Sentrawisata with a short position of Pembangunan Jaya. Check out your portfolio center. Please also check ongoing floating volatility patterns of Panorama Sentrawisata and Pembangunan Jaya.

Diversification Opportunities for Panorama Sentrawisata and Pembangunan Jaya

-0.82

Correlation Coefficient

Panorama Sentrawisata  Pembangunan Jaya

Pay attention - limited upside

The 3 months correlation between Panorama and Pembangunan is -0.82. Overlapping area represents the amount of risk that can be diversified away by holding Panorama Sentrawisata Tbk and Pembangunan Jaya Ancol in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Pembangunan Jaya Ancol and Panorama Sentrawisata 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 Panorama Sentrawisata Tbk are associated (or correlated) with Pembangunan Jaya. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Pembangunan Jaya Ancol has no effect on the direction of Panorama Sentrawisata i.e., Panorama Sentrawisata and Pembangunan Jaya go up and down completely randomly.

Pair Corralation between Panorama Sentrawisata and Pembangunan Jaya

Assuming the 90 days trading horizon Panorama Sentrawisata Tbk is expected to generate 0.96 times more return on investment than Pembangunan Jaya. However, Panorama Sentrawisata Tbk is 1.05 times less risky than Pembangunan Jaya. It trades about 0.36 of its potential returns per unit of risk. Pembangunan Jaya Ancol is currently generating about -0.25 per unit of risk. If you would invest  46,000  in Panorama Sentrawisata Tbk on September 5, 2024 and sell it today you would earn a total of  9,500  from holding Panorama Sentrawisata Tbk or generate 20.65% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Significant
Accuracy	98.41%
Values	Daily Returns

Panorama Sentrawisata Tbk  vs.  Pembangunan Jaya Ancol

Panorama Sentrawisata Tbk

Risk-Adjusted Performance

28 of 100

Strong

Compared to the overall equity markets, risk-adjusted returns on investments in Panorama Sentrawisata Tbk are ranked lower than 28 (%) of all global equities and portfolios over the last 90 days. Despite quite conflicting forward-looking signals, Panorama Sentrawisata disclosed solid returns over the last few months and may actually be approaching a breakup point.

Pembangunan Jaya Ancol

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Pembangunan Jaya Ancol 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 Panorama Sentrawisata and Pembangunan Jaya

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

The idea behind Panorama Sentrawisata Tbk and Pembangunan Jaya Ancol 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 Bond Analysis module to evaluate and analyze corporate bonds as a potential investment for your portfolios..