Correlation Between Pratama Widya and Maha Properti

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

By analyzing existing cross correlation between Pratama Widya Tbk and Maha Properti Indonesia, you can compare the effects of market volatilities on Pratama Widya and Maha Properti 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 Pratama Widya with a short position of Maha Properti. Check out your portfolio center. Please also check ongoing floating volatility patterns of Pratama Widya and Maha Properti.

Diversification Opportunities for Pratama Widya and Maha Properti

0.13

Correlation Coefficient

Pratama Widya  Maha Properti

Average diversification

The 3 months correlation between Pratama and Maha is 0.13. Overlapping area represents the amount of risk that can be diversified away by holding Pratama Widya Tbk and Maha Properti Indonesia in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Maha Properti Indonesia and Pratama Widya 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 Pratama Widya Tbk are associated (or correlated) with Maha Properti. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Maha Properti Indonesia has no effect on the direction of Pratama Widya i.e., Pratama Widya and Maha Properti go up and down completely randomly.

Pair Corralation between Pratama Widya and Maha Properti

Assuming the 90 days trading horizon Pratama Widya Tbk is expected to under-perform the Maha Properti. But the stock apears to be less risky and, when comparing its historical volatility, Pratama Widya Tbk is 4.24 times less risky than Maha Properti. The stock trades about 0.0 of its potential returns per unit of risk. The Maha Properti Indonesia is currently generating about 0.13 of returns per unit of risk over similar time horizon. If you would invest  127,000  in Maha Properti Indonesia on September 15, 2024 and sell it today you would earn a total of  75,000  from holding Maha Properti Indonesia or generate 59.06% return on investment over 90 days.

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

Pratama Widya Tbk  vs.  Maha Properti Indonesia

Pratama Widya Tbk

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Pratama Widya Tbk has generated negative risk-adjusted returns adding no value to investors with long positions. Despite latest conflicting performance, the Stock's forward-looking signals remain persistent and the latest mess on Wall Street may also be a sign of long-standing gains for the company institutional investors.

Maha Properti Indonesia

Risk-Adjusted Performance

27 of 100

Strong

Compared to the overall equity markets, risk-adjusted returns on investments in Maha Properti Indonesia are ranked lower than 27 (%) of all global equities and portfolios over the last 90 days. Despite quite conflicting forward-looking signals, Maha Properti disclosed solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Pratama Widya and Maha Properti

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

The idea behind Pratama Widya Tbk and Maha Properti Indonesia 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 Instant Ratings module to determine any equity ratings based on digital recommendations. Macroaxis instant equity ratings are based on combination of fundamental analysis and risk-adjusted market performance.