Correlation Between Pelayaran Nelly and Indonesia Pondasi

Can any of the company-specific risk be diversified away by investing in both Pelayaran Nelly and Indonesia Pondasi 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 Pelayaran Nelly and Indonesia Pondasi into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Pelayaran Nelly Dwi and Indonesia Pondasi Raya, you can compare the effects of market volatilities on Pelayaran Nelly and Indonesia Pondasi 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 Pelayaran Nelly with a short position of Indonesia Pondasi. Check out your portfolio center. Please also check ongoing floating volatility patterns of Pelayaran Nelly and Indonesia Pondasi.

Diversification Opportunities for Pelayaran Nelly and Indonesia Pondasi

0.28

Correlation Coefficient

Pelayaran Nelly  Indonesia Pondasi

Modest diversification

The 3 months correlation between Pelayaran and Indonesia is 0.28. Overlapping area represents the amount of risk that can be diversified away by holding Pelayaran Nelly Dwi and Indonesia Pondasi Raya in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Indonesia Pondasi Raya and Pelayaran Nelly 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 Pelayaran Nelly Dwi are associated (or correlated) with Indonesia Pondasi. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Indonesia Pondasi Raya has no effect on the direction of Pelayaran Nelly i.e., Pelayaran Nelly and Indonesia Pondasi go up and down completely randomly.

Pair Corralation between Pelayaran Nelly and Indonesia Pondasi

Assuming the 90 days trading horizon Pelayaran Nelly Dwi is expected to under-perform the Indonesia Pondasi. But the stock apears to be less risky and, when comparing its historical volatility, Pelayaran Nelly Dwi is 3.24 times less risky than Indonesia Pondasi. The stock trades about -0.34 of its potential returns per unit of risk. The Indonesia Pondasi Raya is currently generating about -0.04 of returns per unit of risk over similar time horizon. If you would invest  17,500  in Indonesia Pondasi Raya on October 12, 2024 and sell it today you would lose (500.00) from holding Indonesia Pondasi Raya or give up 2.86% of portfolio value over 90 days.

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

Pelayaran Nelly Dwi  vs.  Indonesia Pondasi Raya

Pelayaran Nelly Dwi

Risk-Adjusted Performance

0 of 100

Very Weak

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

Indonesia Pondasi Raya

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Indonesia Pondasi Raya 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 Pelayaran Nelly and Indonesia Pondasi

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

The idea behind Pelayaran Nelly Dwi and Indonesia Pondasi Raya 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 Portfolio Volatility module to check portfolio volatility and analyze historical return density to properly model market risk.