Correlation Between Fortune Mate and Puradelta Lestari

Can any of the company-specific risk be diversified away by investing in both Fortune Mate and Puradelta Lestari 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 Fortune Mate and Puradelta Lestari into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Fortune Mate Indonesia and Puradelta Lestari PT, you can compare the effects of market volatilities on Fortune Mate and Puradelta Lestari 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 Fortune Mate with a short position of Puradelta Lestari. Check out your portfolio center. Please also check ongoing floating volatility patterns of Fortune Mate and Puradelta Lestari.

Diversification Opportunities for Fortune Mate and Puradelta Lestari

-0.65

Correlation Coefficient

Fortune Mate  Puradelta Lestari

Excellent diversification

The 3 months correlation between Fortune and Puradelta is -0.65. Overlapping area represents the amount of risk that can be diversified away by holding Fortune Mate Indonesia and Puradelta Lestari PT in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Puradelta Lestari and Fortune Mate 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 Fortune Mate Indonesia are associated (or correlated) with Puradelta Lestari. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Puradelta Lestari has no effect on the direction of Fortune Mate i.e., Fortune Mate and Puradelta Lestari go up and down completely randomly.

Pair Corralation between Fortune Mate and Puradelta Lestari

If you would invest  54,500  in Fortune Mate Indonesia on October 10, 2024 and sell it today you would earn a total of  0.00  from holding Fortune Mate Indonesia or generate 0.0% return on investment over 90 days.

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

Fortune Mate Indonesia  vs.  Puradelta Lestari PT

Fortune Mate Indonesia

Risk-Adjusted Performance

18 of 100

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in Fortune Mate Indonesia are ranked lower than 18 (%) of all global equities and portfolios over the last 90 days. Despite quite conflicting forward-looking signals, Fortune Mate disclosed solid returns over the last few months and may actually be approaching a breakup point.

Puradelta Lestari

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Puradelta Lestari PT 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 Fortune Mate and Puradelta Lestari

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

The idea behind Fortune Mate Indonesia and Puradelta Lestari PT 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 Volatility Analysis module to get historical volatility and risk analysis based on latest market data.