Correlation Between Optima Prima and Trimegah Karya

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

By analyzing existing cross correlation between Optima Prima Metal and Trimegah Karya Pratama, you can compare the effects of market volatilities on Optima Prima and Trimegah Karya 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 Optima Prima with a short position of Trimegah Karya. Check out your portfolio center. Please also check ongoing floating volatility patterns of Optima Prima and Trimegah Karya.

Diversification Opportunities for Optima Prima and Trimegah Karya

0.51

Correlation Coefficient

Optima Prima  Trimegah Karya

Very weak diversification

The 3 months correlation between Optima and Trimegah is 0.51. Overlapping area represents the amount of risk that can be diversified away by holding Optima Prima Metal and Trimegah Karya Pratama in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Trimegah Karya Pratama and Optima Prima 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 Optima Prima Metal are associated (or correlated) with Trimegah Karya. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Trimegah Karya Pratama has no effect on the direction of Optima Prima i.e., Optima Prima and Trimegah Karya go up and down completely randomly.

Pair Corralation between Optima Prima and Trimegah Karya

Assuming the 90 days trading horizon Optima Prima Metal is expected to generate 0.9 times more return on investment than Trimegah Karya. However, Optima Prima Metal is 1.12 times less risky than Trimegah Karya. It trades about -0.02 of its potential returns per unit of risk. Trimegah Karya Pratama is currently generating about -0.03 per unit of risk. If you would invest  8,400  in Optima Prima Metal on October 26, 2024 and sell it today you would lose (3,400) from holding Optima Prima Metal or give up 40.48% of portfolio value over 90 days.

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

Optima Prima Metal  vs.  Trimegah Karya Pratama

Optima Prima Metal

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Optima Prima Metal has generated negative risk-adjusted returns adding no value to investors with long positions. Despite weak performance in the last few months, the Stock's forward-looking signals remain quite persistent which may send shares a bit higher in February 2025. The latest mess may also be a sign of long-standing up-swing for the company institutional investors.

Trimegah Karya Pratama

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Trimegah Karya Pratama 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 February 2025. The latest mess may also be a sign of long-standing up-swing for the company institutional investors.

Pair Trading with Optima Prima and Trimegah Karya

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

The idea behind Optima Prima Metal and Trimegah Karya Pratama 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 File Import module to quickly import all of your third-party portfolios from your local drive in csv format.