Correlation Between Imago Mulia and Panca Anugrah

Can any of the company-specific risk be diversified away by investing in both Imago Mulia and Panca Anugrah 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 Imago Mulia and Panca Anugrah into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Imago Mulia Persada and Panca Anugrah Wisesa, you can compare the effects of market volatilities on Imago Mulia and Panca Anugrah 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 Imago Mulia with a short position of Panca Anugrah. Check out your portfolio center. Please also check ongoing floating volatility patterns of Imago Mulia and Panca Anugrah.

Diversification Opportunities for Imago Mulia and Panca Anugrah

0.66

Correlation Coefficient

Imago Mulia  Panca Anugrah

Poor diversification

The 3 months correlation between Imago and Panca is 0.66. Overlapping area represents the amount of risk that can be diversified away by holding Imago Mulia Persada and Panca Anugrah Wisesa in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Panca Anugrah Wisesa and Imago Mulia 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 Imago Mulia Persada are associated (or correlated) with Panca Anugrah. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Panca Anugrah Wisesa has no effect on the direction of Imago Mulia i.e., Imago Mulia and Panca Anugrah go up and down completely randomly.

Pair Corralation between Imago Mulia and Panca Anugrah

Assuming the 90 days trading horizon Imago Mulia Persada is expected to generate 1.12 times more return on investment than Panca Anugrah. However, Imago Mulia is 1.12 times more volatile than Panca Anugrah Wisesa. It trades about 0.12 of its potential returns per unit of risk. Panca Anugrah Wisesa is currently generating about 0.1 per unit of risk. If you would invest  8,600  in Imago Mulia Persada on December 29, 2024 and sell it today you would earn a total of  2,800  from holding Imago Mulia Persada or generate 32.56% return on investment over 90 days.

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

Imago Mulia Persada  vs.  Panca Anugrah Wisesa

Imago Mulia Persada

Risk-Adjusted Performance

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Imago Mulia Persada are ranked lower than 9 (%) of all global equities and portfolios over the last 90 days. Despite quite conflicting forward-looking signals, Imago Mulia disclosed solid returns over the last few months and may actually be approaching a breakup point.

Panca Anugrah Wisesa

Risk-Adjusted Performance

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Panca Anugrah Wisesa are ranked lower than 7 (%) of all global equities and portfolios over the last 90 days. Despite quite conflicting forward-looking signals, Panca Anugrah disclosed solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Imago Mulia and Panca Anugrah

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

The idea behind Imago Mulia Persada and Panca Anugrah Wisesa 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 Watchlist Optimization module to optimize watchlists to build efficient portfolios or rebalance existing positions based on the mean-variance optimization algorithm.