Correlation Between Pacific Strategic and Asuransi Kresna

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

By analyzing existing cross correlation between Pacific Strategic Financial and Asuransi Kresna Mitra, you can compare the effects of market volatilities on Pacific Strategic and Asuransi Kresna 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 Pacific Strategic with a short position of Asuransi Kresna. Check out your portfolio center. Please also check ongoing floating volatility patterns of Pacific Strategic and Asuransi Kresna.

Diversification Opportunities for Pacific Strategic and Asuransi Kresna

0.02

Correlation Coefficient

Pacific Strategic  Asuransi Kresna

Significant diversification

The 3 months correlation between Pacific and Asuransi is 0.02. Overlapping area represents the amount of risk that can be diversified away by holding Pacific Strategic Financial and Asuransi Kresna Mitra in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Asuransi Kresna Mitra and Pacific Strategic 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 Pacific Strategic Financial are associated (or correlated) with Asuransi Kresna. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Asuransi Kresna Mitra has no effect on the direction of Pacific Strategic i.e., Pacific Strategic and Asuransi Kresna go up and down completely randomly.

Pair Corralation between Pacific Strategic and Asuransi Kresna

Assuming the 90 days trading horizon Pacific Strategic is expected to generate 5.65 times less return on investment than Asuransi Kresna. But when comparing it to its historical volatility, Pacific Strategic Financial is 4.98 times less risky than Asuransi Kresna. It trades about 0.05 of its potential returns per unit of risk. Asuransi Kresna Mitra is currently generating about 0.05 of returns per unit of risk over similar time horizon. If you would invest  1,200  in Asuransi Kresna Mitra on October 23, 2024 and sell it today you would earn a total of  100.00  from holding Asuransi Kresna Mitra or generate 8.33% return on investment over 90 days.

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

Pacific Strategic Financial  vs.  Asuransi Kresna Mitra

Pacific Strategic

Risk-Adjusted Performance

3 of 100

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in Pacific Strategic Financial are ranked lower than 3 (%) of all global equities and portfolios over the last 90 days. Despite quite persistent forward-looking signals, Pacific Strategic is not utilizing all of its potentials. The latest stock price mess, may contribute to short-term losses for the institutional investors.

Asuransi Kresna Mitra

Risk-Adjusted Performance

4 of 100

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in Asuransi Kresna Mitra are ranked lower than 4 (%) of all global equities and portfolios over the last 90 days. Despite quite conflicting forward-looking signals, Asuransi Kresna disclosed solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Pacific Strategic and Asuransi Kresna

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

The idea behind Pacific Strategic Financial and Asuransi Kresna Mitra 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 Bonds Directory module to find actively traded corporate debentures issued by US companies.