Correlation Between RETAIL FOOD and Perusahaan Perseroan

Can any of the company-specific risk be diversified away by investing in both RETAIL FOOD and Perusahaan Perseroan 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 RETAIL FOOD and Perusahaan Perseroan into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between RETAIL FOOD GROUP and Perusahaan Perseroan PT, you can compare the effects of market volatilities on RETAIL FOOD and Perusahaan Perseroan 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 RETAIL FOOD with a short position of Perusahaan Perseroan. Check out your portfolio center. Please also check ongoing floating volatility patterns of RETAIL FOOD and Perusahaan Perseroan.

Diversification Opportunities for RETAIL FOOD and Perusahaan Perseroan

0.21

Correlation Coefficient

RETAIL FOOD  Perusahaan Perseroan

Modest diversification

The 3 months correlation between RETAIL and Perusahaan is 0.21. Overlapping area represents the amount of risk that can be diversified away by holding RETAIL FOOD GROUP and Perusahaan Perseroan PT in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Perusahaan Perseroan and RETAIL FOOD 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 RETAIL FOOD GROUP are associated (or correlated) with Perusahaan Perseroan. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Perusahaan Perseroan has no effect on the direction of RETAIL FOOD i.e., RETAIL FOOD and Perusahaan Perseroan go up and down completely randomly.

Pair Corralation between RETAIL FOOD and Perusahaan Perseroan

Assuming the 90 days trading horizon RETAIL FOOD GROUP is expected to under-perform the Perusahaan Perseroan. In addition to that, RETAIL FOOD is 1.69 times more volatile than Perusahaan Perseroan PT. It trades about -0.16 of its total potential returns per unit of risk. Perusahaan Perseroan PT is currently generating about -0.13 per unit of volatility. If you would invest  1,560  in Perusahaan Perseroan PT on December 24, 2024 and sell it today you would lose (240.00) from holding Perusahaan Perseroan PT or give up 15.38% of portfolio value over 90 days.

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

RETAIL FOOD GROUP  vs.  Perusahaan Perseroan PT

RETAIL FOOD GROUP

Risk-Adjusted Performance

Very Weak

Over the last 90 days RETAIL FOOD GROUP has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of fragile performance in the last few months, the Stock's basic indicators remain rather sound which may send shares a bit higher in April 2025. The latest tumult may also be a sign of longer-term up-swing for the firm shareholders.

Perusahaan Perseroan

Risk-Adjusted Performance

Very Weak

Over the last 90 days Perusahaan Perseroan PT has generated negative risk-adjusted returns adding no value to investors with long positions. Despite uncertain performance in the last few months, the Stock's basic indicators remain nearly stable which may send shares a bit higher in April 2025. The current disturbance may also be a sign of long-run up-swing for the company stockholders.

Pair Trading with RETAIL FOOD and Perusahaan Perseroan

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

The idea behind RETAIL FOOD GROUP and Perusahaan Perseroan 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 Instant Ratings module to determine any equity ratings based on digital recommendations. Macroaxis instant equity ratings are based on combination of fundamental analysis and risk-adjusted market performance.