Correlation Between Pelayaran Nelly and Paramita Bangun

Can any of the company-specific risk be diversified away by investing in both Pelayaran Nelly and Paramita Bangun 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 Paramita Bangun 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 Paramita Bangun Sarana, you can compare the effects of market volatilities on Pelayaran Nelly and Paramita Bangun 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 Paramita Bangun. Check out your portfolio center. Please also check ongoing floating volatility patterns of Pelayaran Nelly and Paramita Bangun.

Diversification Opportunities for Pelayaran Nelly and Paramita Bangun

0.29

Correlation Coefficient

Pelayaran Nelly  Paramita Bangun

Modest diversification

The 3 months correlation between Pelayaran and Paramita is 0.29. Overlapping area represents the amount of risk that can be diversified away by holding Pelayaran Nelly Dwi and Paramita Bangun Sarana in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Paramita Bangun Sarana 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 Paramita Bangun. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Paramita Bangun Sarana has no effect on the direction of Pelayaran Nelly i.e., Pelayaran Nelly and Paramita Bangun go up and down completely randomly.

Pair Corralation between Pelayaran Nelly and Paramita Bangun

Assuming the 90 days trading horizon Pelayaran Nelly Dwi is expected to under-perform the Paramita Bangun. But the stock apears to be less risky and, when comparing its historical volatility, Pelayaran Nelly Dwi is 1.49 times less risky than Paramita Bangun. The stock trades about -0.14 of its potential returns per unit of risk. The Paramita Bangun Sarana is currently generating about -0.01 of returns per unit of risk over similar time horizon. If you would invest  36,400  in Paramita Bangun Sarana on December 23, 2024 and sell it today you would lose (1,400) from holding Paramita Bangun Sarana or give up 3.85% 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.  Paramita Bangun Sarana

Pelayaran Nelly Dwi

Risk-Adjusted Performance

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 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.

Paramita Bangun Sarana

Risk-Adjusted Performance

Very Weak

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

Pair Trading with Pelayaran Nelly and Paramita Bangun

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

The idea behind Pelayaran Nelly Dwi and Paramita Bangun Sarana 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 Suggestion module to get suggestions outside of your existing asset allocation including your own model portfolios.