Correlation Between Prasidha Aneka and Pratama Abadi

Can any of the company-specific risk be diversified away by investing in both Prasidha Aneka and Pratama Abadi 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 Prasidha Aneka and Pratama Abadi into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Prasidha Aneka Niaga and Pratama Abadi Nusa, you can compare the effects of market volatilities on Prasidha Aneka and Pratama Abadi 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 Prasidha Aneka with a short position of Pratama Abadi. Check out your portfolio center. Please also check ongoing floating volatility patterns of Prasidha Aneka and Pratama Abadi.

Diversification Opportunities for Prasidha Aneka and Pratama Abadi

0.18

Correlation Coefficient

Prasidha Aneka  Pratama Abadi

Average diversification

The 3 months correlation between Prasidha and Pratama is 0.18. Overlapping area represents the amount of risk that can be diversified away by holding Prasidha Aneka Niaga and Pratama Abadi Nusa in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Pratama Abadi Nusa and Prasidha Aneka 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 Prasidha Aneka Niaga are associated (or correlated) with Pratama Abadi. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Pratama Abadi Nusa has no effect on the direction of Prasidha Aneka i.e., Prasidha Aneka and Pratama Abadi go up and down completely randomly.

Pair Corralation between Prasidha Aneka and Pratama Abadi

Assuming the 90 days trading horizon Prasidha Aneka Niaga is expected to generate 0.96 times more return on investment than Pratama Abadi. However, Prasidha Aneka Niaga is 1.05 times less risky than Pratama Abadi. It trades about 0.01 of its potential returns per unit of risk. Pratama Abadi Nusa is currently generating about -0.02 per unit of risk. If you would invest  8,700  in Prasidha Aneka Niaga on October 27, 2024 and sell it today you would lose (400.00) from holding Prasidha Aneka Niaga or give up 4.6% of portfolio value over 90 days.

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

Prasidha Aneka Niaga  vs.  Pratama Abadi Nusa

Prasidha Aneka Niaga

Risk-Adjusted Performance

0 of 100

Very Weak

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

Pratama Abadi Nusa

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Pratama Abadi Nusa 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 Prasidha Aneka and Pratama Abadi

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

The idea behind Prasidha Aneka Niaga and Pratama Abadi Nusa 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 Financial Widgets module to easily integrated Macroaxis content with over 30 different plug-and-play financial widgets.