Correlation Between PT Data and Alumindo Light

Can any of the company-specific risk be diversified away by investing in both PT Data and Alumindo Light 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 PT Data and Alumindo Light into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between PT Data Sinergitama and Alumindo Light Metal, you can compare the effects of market volatilities on PT Data and Alumindo Light 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 PT Data with a short position of Alumindo Light. Check out your portfolio center. Please also check ongoing floating volatility patterns of PT Data and Alumindo Light.

Diversification Opportunities for PT Data and Alumindo Light

0.56

Correlation Coefficient

PT Data  Alumindo Light

Very weak diversification

The 3 months correlation between ELIT and Alumindo is 0.56. Overlapping area represents the amount of risk that can be diversified away by holding PT Data Sinergitama and Alumindo Light Metal in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Alumindo Light Metal and PT Data 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 PT Data Sinergitama are associated (or correlated) with Alumindo Light. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Alumindo Light Metal has no effect on the direction of PT Data i.e., PT Data and Alumindo Light go up and down completely randomly.

Pair Corralation between PT Data and Alumindo Light

If you would invest  11,900  in PT Data Sinergitama on October 20, 2024 and sell it today you would earn a total of  500.00  from holding PT Data Sinergitama or generate 4.2% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Weak
Accuracy	94.74%
Values	Daily Returns

PT Data Sinergitama  vs.  Alumindo Light Metal

PT Data Sinergitama

Risk-Adjusted Performance

2 of 100

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in PT Data Sinergitama are ranked lower than 2 (%) of all global equities and portfolios over the last 90 days. Despite quite conflicting forward-looking signals, PT Data may actually be approaching a critical reversion point that can send shares even higher in February 2025.

Alumindo Light Metal

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Alumindo Light Metal 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.

Pair Trading with PT Data and Alumindo Light

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

The idea behind PT Data Sinergitama and Alumindo Light Metal 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 My Watchlist Analysis module to analyze my current watchlist and to refresh optimization strategy. Macroaxis watchlist is based on self-learning algorithm to remember stocks you like.