Correlation Between Pollux Properti and Repower Asia

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

By analyzing existing cross correlation between Pollux Properti Indonesia and Repower Asia Indonesia, you can compare the effects of market volatilities on Pollux Properti and Repower Asia 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 Pollux Properti with a short position of Repower Asia. Check out your portfolio center. Please also check ongoing floating volatility patterns of Pollux Properti and Repower Asia.

Diversification Opportunities for Pollux Properti and Repower Asia

0.0

Correlation Coefficient

Pollux Properti  Repower Asia

Pay attention - limited upside

The 3 months correlation between Pollux and Repower is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding Pollux Properti Indonesia and Repower Asia Indonesia in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Repower Asia Indonesia and Pollux Properti 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 Pollux Properti Indonesia are associated (or correlated) with Repower Asia. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Repower Asia Indonesia has no effect on the direction of Pollux Properti i.e., Pollux Properti and Repower Asia go up and down completely randomly.

Pair Corralation between Pollux Properti and Repower Asia

Assuming the 90 days trading horizon Pollux Properti Indonesia is expected to generate 0.35 times more return on investment than Repower Asia. However, Pollux Properti Indonesia is 2.83 times less risky than Repower Asia. It trades about -0.02 of its potential returns per unit of risk. Repower Asia Indonesia is currently generating about -0.01 per unit of risk. If you would invest  16,400  in Pollux Properti Indonesia on November 29, 2024 and sell it today you would lose (5,200) from holding Pollux Properti Indonesia or give up 31.71% of portfolio value over 90 days.

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

Pollux Properti Indonesia  vs.  Repower Asia Indonesia

Pollux Properti Indonesia

Risk-Adjusted Performance

Very Weak

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

Repower Asia Indonesia

Risk-Adjusted Performance

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in Repower Asia Indonesia are ranked lower than 5 (%) of all global equities and portfolios over the last 90 days. Despite quite conflicting forward-looking signals, Repower Asia disclosed solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Pollux Properti and Repower Asia

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

The idea behind Pollux Properti Indonesia and Repower Asia 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.

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 Equity Analysis module to research over 250,000 global equities including funds, stocks and ETFs to find investment opportunities.