Correlation Between Panca Budi and Mark Dynamics

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

By analyzing existing cross correlation between Panca Budi Idaman and Mark Dynamics Indonesia, you can compare the effects of market volatilities on Panca Budi and Mark Dynamics 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 Panca Budi with a short position of Mark Dynamics. Check out your portfolio center. Please also check ongoing floating volatility patterns of Panca Budi and Mark Dynamics.

Diversification Opportunities for Panca Budi and Mark Dynamics

-0.35

Correlation Coefficient

Panca Budi  Mark Dynamics

Very good diversification

The 3 months correlation between Panca and Mark is -0.35. Overlapping area represents the amount of risk that can be diversified away by holding Panca Budi Idaman and Mark Dynamics Indonesia in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Mark Dynamics Indonesia and Panca Budi 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 Panca Budi Idaman are associated (or correlated) with Mark Dynamics. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Mark Dynamics Indonesia has no effect on the direction of Panca Budi i.e., Panca Budi and Mark Dynamics go up and down completely randomly.

Pair Corralation between Panca Budi and Mark Dynamics

Assuming the 90 days trading horizon Panca Budi Idaman is expected to generate 1.46 times more return on investment than Mark Dynamics. However, Panca Budi is 1.46 times more volatile than Mark Dynamics Indonesia. It trades about 0.0 of its potential returns per unit of risk. Mark Dynamics Indonesia is currently generating about -0.15 per unit of risk. If you would invest  51,000  in Panca Budi Idaman on December 27, 2024 and sell it today you would lose (500.00) from holding Panca Budi Idaman or give up 0.98% of portfolio value over 90 days.

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

Panca Budi Idaman  vs.  Mark Dynamics Indonesia

Panca Budi Idaman

Risk-Adjusted Performance

Very Weak

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

Mark Dynamics Indonesia

Risk-Adjusted Performance

Very Weak

Over the last 90 days Mark Dynamics Indonesia 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 Panca Budi and Mark Dynamics

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

The idea behind Panca Budi Idaman and Mark Dynamics Indonesia 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 USA ETFs module to find actively traded Exchange Traded Funds (ETF) in USA.