Correlation Between Putra Mandiri and Saraswanti Anugerah

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

By analyzing existing cross correlation between Putra Mandiri Jembar and Saraswanti Anugerah Makmur, you can compare the effects of market volatilities on Putra Mandiri and Saraswanti Anugerah 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 Putra Mandiri with a short position of Saraswanti Anugerah. Check out your portfolio center. Please also check ongoing floating volatility patterns of Putra Mandiri and Saraswanti Anugerah.

Diversification Opportunities for Putra Mandiri and Saraswanti Anugerah

-0.25

Correlation Coefficient

Putra Mandiri  Saraswanti Anugerah

Very good diversification

The 3 months correlation between Putra and Saraswanti is -0.25. Overlapping area represents the amount of risk that can be diversified away by holding Putra Mandiri Jembar and Saraswanti Anugerah Makmur in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Saraswanti Anugerah and Putra Mandiri 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 Putra Mandiri Jembar are associated (or correlated) with Saraswanti Anugerah. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Saraswanti Anugerah has no effect on the direction of Putra Mandiri i.e., Putra Mandiri and Saraswanti Anugerah go up and down completely randomly.

Pair Corralation between Putra Mandiri and Saraswanti Anugerah

Assuming the 90 days trading horizon Putra Mandiri Jembar is expected to generate 0.44 times more return on investment than Saraswanti Anugerah. However, Putra Mandiri Jembar is 2.26 times less risky than Saraswanti Anugerah. It trades about -0.02 of its potential returns per unit of risk. Saraswanti Anugerah Makmur is currently generating about -0.02 per unit of risk. If you would invest  12,100  in Putra Mandiri Jembar on December 2, 2024 and sell it today you would lose (600.00) from holding Putra Mandiri Jembar or give up 4.96% of portfolio value over 90 days.

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

Putra Mandiri Jembar  vs.  Saraswanti Anugerah Makmur

Putra Mandiri Jembar

Risk-Adjusted Performance

Very Weak

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

Saraswanti Anugerah

Risk-Adjusted Performance

Very Weak

Over the last 90 days Saraswanti Anugerah Makmur 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 Putra Mandiri and Saraswanti Anugerah

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

The idea behind Putra Mandiri Jembar and Saraswanti Anugerah Makmur 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.

Check out your portfolio center.

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 Technical Analysis module to check basic technical indicators and analysis based on most latest market data.