Correlation Between PP Properti and Grand House

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

By analyzing existing cross correlation between PP Properti Tbk and Grand House Mulia, you can compare the effects of market volatilities on PP Properti and Grand House 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 PP Properti with a short position of Grand House. Check out your portfolio center. Please also check ongoing floating volatility patterns of PP Properti and Grand House.

Diversification Opportunities for PP Properti and Grand House

-0.52

Correlation Coefficient

PP Properti  Grand House

Excellent diversification

The 3 months correlation between PPRO and Grand is -0.52. Overlapping area represents the amount of risk that can be diversified away by holding PP Properti Tbk and Grand House Mulia in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Grand House Mulia and PP 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 PP Properti Tbk are associated (or correlated) with Grand House. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Grand House Mulia has no effect on the direction of PP Properti i.e., PP Properti and Grand House go up and down completely randomly.

Pair Corralation between PP Properti and Grand House

If you would invest  36,600  in Grand House Mulia on August 31, 2024 and sell it today you would earn a total of  0.00  from holding Grand House Mulia or generate 0.0% return on investment over 90 days.

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

PP Properti Tbk  vs.  Grand House Mulia

PP Properti Tbk

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days PP Properti Tbk 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 December 2024. The latest mess may also be a sign of long-standing up-swing for the company institutional investors.

Grand House Mulia

Risk-Adjusted Performance

17 of 100

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in Grand House Mulia are ranked lower than 17 (%) of all global equities and portfolios over the last 90 days. Despite quite conflicting forward-looking signals, Grand House disclosed solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with PP Properti and Grand House

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

The idea behind PP Properti Tbk and Grand House Mulia 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 Latest Portfolios module to quick portfolio dashboard that showcases your latest portfolios.