Correlation Between Perusahaan Perseroan and Fastenal

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

By analyzing existing cross correlation between Perusahaan Perseroan PT and Fastenal Company, you can compare the effects of market volatilities on Perusahaan Perseroan and Fastenal 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 Perusahaan Perseroan with a short position of Fastenal. Check out your portfolio center. Please also check ongoing floating volatility patterns of Perusahaan Perseroan and Fastenal.

Diversification Opportunities for Perusahaan Perseroan and Fastenal

-0.75

Correlation Coefficient

Perusahaan Perseroan  Fastenal

Pay attention - limited upside

The 3 months correlation between Perusahaan and Fastenal is -0.75. Overlapping area represents the amount of risk that can be diversified away by holding Perusahaan Perseroan PT and Fastenal Company in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Fastenal and Perusahaan Perseroan 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 Perusahaan Perseroan PT are associated (or correlated) with Fastenal. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Fastenal has no effect on the direction of Perusahaan Perseroan i.e., Perusahaan Perseroan and Fastenal go up and down completely randomly.

Pair Corralation between Perusahaan Perseroan and Fastenal

Assuming the 90 days horizon Perusahaan Perseroan PT is expected to under-perform the Fastenal. In addition to that, Perusahaan Perseroan is 1.63 times more volatile than Fastenal Company. It trades about -0.03 of its total potential returns per unit of risk. Fastenal Company is currently generating about 0.24 per unit of volatility. If you would invest  6,080  in Fastenal Company on September 3, 2024 and sell it today you would earn a total of  1,843  from holding Fastenal Company or generate 30.31% return on investment over 90 days.

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

Perusahaan Perseroan PT  vs.  Fastenal Company

Perusahaan Perseroan

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Perusahaan Perseroan PT has generated negative risk-adjusted returns adding no value to investors with long positions. Despite nearly stable basic indicators, Perusahaan Perseroan is not utilizing all of its potentials. The current stock price disturbance, may contribute to mid-run losses for the stockholders.

Fastenal

Risk-Adjusted Performance

18 of 100

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in Fastenal Company are ranked lower than 18 (%) of all global equities and portfolios over the last 90 days. Despite nearly unsteady basic indicators, Fastenal reported solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Perusahaan Perseroan and Fastenal

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

The idea behind Perusahaan Perseroan PT and Fastenal Company 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 Earnings Calls module to check upcoming earnings announcements updated hourly across public exchanges.