Correlation Between Pelita Samudera and Asuransi Jiwa

Can any of the company-specific risk be diversified away by investing in both Pelita Samudera and Asuransi Jiwa 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 Pelita Samudera and Asuransi Jiwa into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Pelita Samudera Shipping and Asuransi Jiwa Syariah, you can compare the effects of market volatilities on Pelita Samudera and Asuransi Jiwa 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 Pelita Samudera with a short position of Asuransi Jiwa. Check out your portfolio center. Please also check ongoing floating volatility patterns of Pelita Samudera and Asuransi Jiwa.

Diversification Opportunities for Pelita Samudera and Asuransi Jiwa

-0.19

Correlation Coefficient

Pelita Samudera  Asuransi Jiwa

Good diversification

The 3 months correlation between Pelita and Asuransi is -0.19. Overlapping area represents the amount of risk that can be diversified away by holding Pelita Samudera Shipping and Asuransi Jiwa Syariah in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Asuransi Jiwa Syariah and Pelita Samudera 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 Pelita Samudera Shipping are associated (or correlated) with Asuransi Jiwa. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Asuransi Jiwa Syariah has no effect on the direction of Pelita Samudera i.e., Pelita Samudera and Asuransi Jiwa go up and down completely randomly.

Pair Corralation between Pelita Samudera and Asuransi Jiwa

Assuming the 90 days trading horizon Pelita Samudera Shipping is expected to under-perform the Asuransi Jiwa. But the stock apears to be less risky and, when comparing its historical volatility, Pelita Samudera Shipping is 6.67 times less risky than Asuransi Jiwa. The stock trades about -0.15 of its potential returns per unit of risk. The Asuransi Jiwa Syariah is currently generating about 0.01 of returns per unit of risk over similar time horizon. If you would invest  15,500  in Asuransi Jiwa Syariah on October 25, 2024 and sell it today you would lose (800.00) from holding Asuransi Jiwa Syariah or give up 5.16% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Insignificant
Accuracy	98.33%
Values	Daily Returns

Pelita Samudera Shipping  vs.  Asuransi Jiwa Syariah

Pelita Samudera Shipping

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Pelita Samudera Shipping has generated negative risk-adjusted returns adding no value to investors with long positions. Despite latest weak 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.

Asuransi Jiwa Syariah

Risk-Adjusted Performance

0 of 100

Very Weak

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

Pair Trading with Pelita Samudera and Asuransi Jiwa

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

The idea behind Pelita Samudera Shipping and Asuransi Jiwa Syariah 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 Commodity Directory module to find actively traded commodities issued by global exchanges.