Correlation Between Pabrik Kertas and Armada Berjaya
Can any of the company-specific risk be diversified away by investing in both Pabrik Kertas and Armada Berjaya 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 Pabrik Kertas and Armada Berjaya into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Pabrik Kertas Tjiwi and Armada Berjaya Trans, you can compare the effects of market volatilities on Pabrik Kertas and Armada Berjaya 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 Pabrik Kertas with a short position of Armada Berjaya. Check out your portfolio center. Please also check ongoing floating volatility patterns of Pabrik Kertas and Armada Berjaya.
Diversification Opportunities for Pabrik Kertas and Armada Berjaya
0.95 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between Pabrik and Armada is 0.95. Overlapping area represents the amount of risk that can be diversified away by holding Pabrik Kertas Tjiwi and Armada Berjaya Trans in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Armada Berjaya Trans and Pabrik Kertas 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 Pabrik Kertas Tjiwi are associated (or correlated) with Armada Berjaya. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Armada Berjaya Trans has no effect on the direction of Pabrik Kertas i.e., Pabrik Kertas and Armada Berjaya go up and down completely randomly.
Pair Corralation between Pabrik Kertas and Armada Berjaya
Assuming the 90 days trading horizon Pabrik Kertas Tjiwi is expected to generate 0.9 times more return on investment than Armada Berjaya. However, Pabrik Kertas Tjiwi is 1.11 times less risky than Armada Berjaya. It trades about -0.1 of its potential returns per unit of risk. Armada Berjaya Trans is currently generating about -0.1 per unit of risk. If you would invest 722,500 in Pabrik Kertas Tjiwi on September 15, 2024 and sell it today you would lose (90,000) from holding Pabrik Kertas Tjiwi or give up 12.46% of portfolio value over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Together |
Strength | Very Strong |
Accuracy | 100.0% |
Values | Daily Returns |
Pabrik Kertas Tjiwi vs. Armada Berjaya Trans
Performance |
Timeline |
Pabrik Kertas Tjiwi |
Armada Berjaya Trans |
Pabrik Kertas and Armada Berjaya Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Pabrik Kertas and Armada Berjaya
The main advantage of trading using opposite Pabrik Kertas and Armada Berjaya positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Pabrik Kertas position performs unexpectedly, Armada Berjaya 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 Armada Berjaya will offset losses from the drop in Armada Berjaya's long position.Pabrik Kertas vs. Kedaung Indah Can | Pabrik Kertas vs. Kabelindo Murni Tbk | Pabrik Kertas vs. Champion Pacific Indonesia | Pabrik Kertas vs. Bhuwanatala Indah Permai |
Armada Berjaya vs. PT Trimuda Nuansa | Armada Berjaya vs. Yelooo Integra Datanet | Armada Berjaya vs. Transcoal Pacific Tbk | Armada Berjaya vs. Weha Transportasi Indonesia |
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 Sign In To Macroaxis module to sign in to explore Macroaxis' wealth optimization platform and fintech modules.
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