Correlation Between Indo Pureco and Pratama Abadi

Can any of the company-specific risk be diversified away by investing in both Indo Pureco and Pratama Abadi 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 Indo Pureco and Pratama Abadi into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Indo Pureco Pratama and Pratama Abadi Nusa, you can compare the effects of market volatilities on Indo Pureco and Pratama Abadi 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 Indo Pureco with a short position of Pratama Abadi. Check out your portfolio center. Please also check ongoing floating volatility patterns of Indo Pureco and Pratama Abadi.

Diversification Opportunities for Indo Pureco and Pratama Abadi

0.0

Correlation Coefficient

Indo Pureco  Pratama Abadi

Pay attention - limited upside

The 3 months correlation between Indo and Pratama is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding Indo Pureco Pratama and Pratama Abadi Nusa in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Pratama Abadi Nusa and Indo Pureco 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 Indo Pureco Pratama are associated (or correlated) with Pratama Abadi. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Pratama Abadi Nusa has no effect on the direction of Indo Pureco i.e., Indo Pureco and Pratama Abadi go up and down completely randomly.

Pair Corralation between Indo Pureco and Pratama Abadi

If you would invest  1,400  in Indo Pureco Pratama on December 21, 2024 and sell it today you would earn a total of  0.00  from holding Indo Pureco Pratama or generate 0.0% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Flat
Strength	Insignificant
Accuracy	98.28%
Values	Daily Returns

Indo Pureco Pratama  vs.  Pratama Abadi Nusa

Indo Pureco Pratama

Risk-Adjusted Performance

Very Weak

Over the last 90 days Indo Pureco Pratama has generated negative risk-adjusted returns adding no value to investors with long positions. Despite quite persistent forward-looking signals, Indo Pureco is not utilizing all of its potentials. The current stock price mess, may contribute to short-term losses for the institutional investors.

Pratama Abadi Nusa

Risk-Adjusted Performance

Very Weak

Over the last 90 days Pratama Abadi Nusa has generated negative risk-adjusted returns adding no value to investors with long positions. Despite weak performance in the last few months, the Stock's forward-looking signals remain quite persistent which may send shares a bit higher in April 2025. The latest mess may also be a sign of long-standing up-swing for the company institutional investors.

Pair Trading with Indo Pureco and Pratama Abadi

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

The idea behind Indo Pureco Pratama and Pratama Abadi Nusa 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 Theme Ratings module to determine theme ratings based on digital equity recommendations. Macroaxis theme ratings are based on combination of fundamental analysis and risk-adjusted market performance.