Correlation Between Panorama Sentrawisata and Prima Alloy

Can any of the company-specific risk be diversified away by investing in both Panorama Sentrawisata and Prima Alloy 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 Prima Alloy 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 Prima Alloy Steel, you can compare the effects of market volatilities on Panorama Sentrawisata and Prima Alloy 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 Prima Alloy. Check out your portfolio center. Please also check ongoing floating volatility patterns of Panorama Sentrawisata and Prima Alloy.

Diversification Opportunities for Panorama Sentrawisata and Prima Alloy

0.0

Correlation Coefficient

Panorama Sentrawisata  Prima Alloy

Pay attention - limited upside

The 3 months correlation between Panorama and Prima is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding Panorama Sentrawisata Tbk and Prima Alloy Steel in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Prima Alloy Steel 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 Prima Alloy. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Prima Alloy Steel has no effect on the direction of Panorama Sentrawisata i.e., Panorama Sentrawisata and Prima Alloy go up and down completely randomly.

Pair Corralation between Panorama Sentrawisata and Prima Alloy

If you would invest  48,200  in Panorama Sentrawisata Tbk on September 24, 2024 and sell it today you would earn a total of  10,300  from holding Panorama Sentrawisata Tbk or generate 21.37% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Flat
Strength	Insignificant
Accuracy	98.44%
Values	Daily Returns

Panorama Sentrawisata Tbk  vs.  Prima Alloy Steel

Panorama Sentrawisata Tbk

Risk-Adjusted Performance

22 of 100

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in Panorama Sentrawisata Tbk are ranked lower than 22 (%) 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.

Prima Alloy Steel

Risk-Adjusted Performance

0 of 100

Very Weak

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

Pair Trading with Panorama Sentrawisata and Prima Alloy

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

The idea behind Panorama Sentrawisata Tbk and Prima Alloy Steel 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 Commodity Directory module to find actively traded commodities issued by global exchanges.