Correlation Between Pikko Land and Indonesia Prima

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

By analyzing existing cross correlation between Pikko Land Development and Indonesia Prima Property, you can compare the effects of market volatilities on Pikko Land and Indonesia Prima 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 Pikko Land with a short position of Indonesia Prima. Check out your portfolio center. Please also check ongoing floating volatility patterns of Pikko Land and Indonesia Prima.

Diversification Opportunities for Pikko Land and Indonesia Prima

-0.3

Correlation Coefficient

Pikko Land  Indonesia Prima

Very good diversification

The 3 months correlation between Pikko and Indonesia is -0.3. Overlapping area represents the amount of risk that can be diversified away by holding Pikko Land Development and Indonesia Prima Property in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Indonesia Prima Property and Pikko Land 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 Pikko Land Development are associated (or correlated) with Indonesia Prima. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Indonesia Prima Property has no effect on the direction of Pikko Land i.e., Pikko Land and Indonesia Prima go up and down completely randomly.

Pair Corralation between Pikko Land and Indonesia Prima

Assuming the 90 days trading horizon Pikko Land Development is expected to generate 0.81 times more return on investment than Indonesia Prima. However, Pikko Land Development is 1.24 times less risky than Indonesia Prima. It trades about 0.0 of its potential returns per unit of risk. Indonesia Prima Property is currently generating about -0.03 per unit of risk. If you would invest  5,800  in Pikko Land Development on September 14, 2024 and sell it today you would lose (1,600) from holding Pikko Land Development or give up 27.59% of portfolio value over 90 days.

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

Pikko Land Development  vs.  Indonesia Prima Property

Pikko Land Development

Risk-Adjusted Performance

5 of 100

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in Pikko Land Development are ranked lower than 5 (%) of all global equities and portfolios over the last 90 days. Despite quite conflicting forward-looking signals, Pikko Land disclosed solid returns over the last few months and may actually be approaching a breakup point.

Indonesia Prima Property

Risk-Adjusted Performance

5 of 100

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in Indonesia Prima Property are ranked lower than 5 (%) of all global equities and portfolios over the last 90 days. Despite quite persistent forward-looking signals, Indonesia Prima 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 Pikko Land and Indonesia Prima

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

The idea behind Pikko Land Development and Indonesia Prima Property 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 Balance Of Power module to check stock momentum by analyzing Balance Of Power indicator and other technical ratios.