Correlation Between Intermedia Capital and Pudjiadi Sons

Can any of the company-specific risk be diversified away by investing in both Intermedia Capital and Pudjiadi Sons 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 Intermedia Capital and Pudjiadi Sons into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Intermedia Capital Tbk and Pudjiadi Sons Tbk, you can compare the effects of market volatilities on Intermedia Capital and Pudjiadi Sons 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 Intermedia Capital with a short position of Pudjiadi Sons. Check out your portfolio center. Please also check ongoing floating volatility patterns of Intermedia Capital and Pudjiadi Sons.

Diversification Opportunities for Intermedia Capital and Pudjiadi Sons

-0.58

Correlation Coefficient

Intermedia Capital  Pudjiadi Sons

Excellent diversification

The 3 months correlation between Intermedia and Pudjiadi is -0.58. Overlapping area represents the amount of risk that can be diversified away by holding Intermedia Capital Tbk and Pudjiadi Sons Tbk in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Pudjiadi Sons Tbk and Intermedia Capital 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 Intermedia Capital Tbk are associated (or correlated) with Pudjiadi Sons. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Pudjiadi Sons Tbk has no effect on the direction of Intermedia Capital i.e., Intermedia Capital and Pudjiadi Sons go up and down completely randomly.

Pair Corralation between Intermedia Capital and Pudjiadi Sons

Assuming the 90 days trading horizon Intermedia Capital Tbk is expected to generate 0.79 times more return on investment than Pudjiadi Sons. However, Intermedia Capital Tbk is 1.27 times less risky than Pudjiadi Sons. It trades about 0.6 of its potential returns per unit of risk. Pudjiadi Sons Tbk is currently generating about -0.32 per unit of risk. If you would invest  1,000.00  in Intermedia Capital Tbk on December 4, 2024 and sell it today you would earn a total of  3,100  from holding Intermedia Capital Tbk or generate 310.0% return on investment over 90 days.

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

Intermedia Capital Tbk  vs.  Pudjiadi Sons Tbk

Intermedia Capital Tbk

Risk-Adjusted Performance

Excellent

Compared to the overall equity markets, risk-adjusted returns on investments in Intermedia Capital Tbk are ranked lower than 47 (%) of all global equities and portfolios over the last 90 days. Despite quite conflicting forward-looking signals, Intermedia Capital disclosed solid returns over the last few months and may actually be approaching a breakup point.

Pudjiadi Sons Tbk

Risk-Adjusted Performance

Very Weak

Over the last 90 days Pudjiadi Sons Tbk has generated negative risk-adjusted returns adding no value to investors with long positions. Despite conflicting 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 Intermedia Capital and Pudjiadi Sons

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

The idea behind Intermedia Capital Tbk and Pudjiadi Sons Tbk 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 Fundamentals Comparison module to compare fundamentals across multiple equities to find investing opportunities.