Correlation Between PAM Mineral and Ifishdeco

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

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

Diversification Opportunities for PAM Mineral and Ifishdeco

-0.69

Correlation Coefficient

PAM Mineral  Ifishdeco

Excellent diversification

The 3 months correlation between PAM and Ifishdeco is -0.69. Overlapping area represents the amount of risk that can be diversified away by holding PAM Mineral Tbk and Ifishdeco PT in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Ifishdeco PT and PAM Mineral 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 PAM Mineral Tbk are associated (or correlated) with Ifishdeco. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Ifishdeco PT has no effect on the direction of PAM Mineral i.e., PAM Mineral and Ifishdeco go up and down completely randomly.

Pair Corralation between PAM Mineral and Ifishdeco

Assuming the 90 days trading horizon PAM Mineral Tbk is expected to under-perform the Ifishdeco. But the stock apears to be less risky and, when comparing its historical volatility, PAM Mineral Tbk is 2.3 times less risky than Ifishdeco. The stock trades about -0.06 of its potential returns per unit of risk. The Ifishdeco PT is currently generating about 0.03 of returns per unit of risk over similar time horizon. If you would invest  77,000  in Ifishdeco PT on December 2, 2024 and sell it today you would earn a total of  0.00  from holding Ifishdeco PT or generate 0.0% return on investment over 90 days.

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

PAM Mineral Tbk  vs.  Ifishdeco PT

PAM Mineral Tbk

Risk-Adjusted Performance

Very Weak

Over the last 90 days PAM Mineral Tbk 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.

Ifishdeco PT

Risk-Adjusted Performance

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Ifishdeco PT are ranked lower than 2 (%) of all global equities and portfolios over the last 90 days. Despite quite conflicting forward-looking signals, Ifishdeco may actually be approaching a critical reversion point that can send shares even higher in April 2025.

Pair Trading with PAM Mineral and Ifishdeco

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

The idea behind PAM Mineral Tbk and Ifishdeco 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 Bonds Directory module to find actively traded corporate debentures issued by US companies.