Correlation Between Transkon Jaya and Prima Globalindo
Can any of the company-specific risk be diversified away by investing in both Transkon Jaya and Prima Globalindo 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 Transkon Jaya and Prima Globalindo into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Transkon Jaya Pt and Prima Globalindo Logistik, you can compare the effects of market volatilities on Transkon Jaya and Prima Globalindo 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 Transkon Jaya with a short position of Prima Globalindo. Check out your portfolio center. Please also check ongoing floating volatility patterns of Transkon Jaya and Prima Globalindo.
Diversification Opportunities for Transkon Jaya and Prima Globalindo
0.04 | Correlation Coefficient |
Significant diversification
The 3 months correlation between Transkon and Prima is 0.04. Overlapping area represents the amount of risk that can be diversified away by holding Transkon Jaya Pt and Prima Globalindo Logistik in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Prima Globalindo Logistik and Transkon Jaya 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 Transkon Jaya Pt are associated (or correlated) with Prima Globalindo. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Prima Globalindo Logistik has no effect on the direction of Transkon Jaya i.e., Transkon Jaya and Prima Globalindo go up and down completely randomly.
Pair Corralation between Transkon Jaya and Prima Globalindo
Assuming the 90 days trading horizon Transkon Jaya Pt is expected to under-perform the Prima Globalindo. In addition to that, Transkon Jaya is 1.28 times more volatile than Prima Globalindo Logistik. It trades about -0.09 of its total potential returns per unit of risk. Prima Globalindo Logistik is currently generating about 0.05 per unit of volatility. If you would invest 10,307 in Prima Globalindo Logistik on September 29, 2024 and sell it today you would earn a total of 293.00 from holding Prima Globalindo Logistik or generate 2.84% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Together |
Strength | Insignificant |
Accuracy | 98.41% |
Values | Daily Returns |
Transkon Jaya Pt vs. Prima Globalindo Logistik
Performance |
Timeline |
Transkon Jaya Pt |
Prima Globalindo Logistik |
Transkon Jaya and Prima Globalindo Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Transkon Jaya and Prima Globalindo
The main advantage of trading using opposite Transkon Jaya and Prima Globalindo positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Transkon Jaya position performs unexpectedly, Prima Globalindo 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 Globalindo will offset losses from the drop in Prima Globalindo's long position.Transkon Jaya vs. Pelayaran Nelly Dwi | Transkon Jaya vs. Guna Timur Raya | Transkon Jaya vs. Batavia Prosperindo Trans | Transkon Jaya vs. PT Trimuda Nuansa |
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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 Portfolio Optimization module to compute new portfolio that will generate highest expected return given your specified tolerance for risk.
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