Correlation Between Perusahaan Perseroan and FARM 51

Can any of the company-specific risk be diversified away by investing in both Perusahaan Perseroan and FARM 51 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 Perusahaan Perseroan and FARM 51 into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Perusahaan Perseroan PT and FARM 51 GROUP, you can compare the effects of market volatilities on Perusahaan Perseroan and FARM 51 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 Perusahaan Perseroan with a short position of FARM 51. Check out your portfolio center. Please also check ongoing floating volatility patterns of Perusahaan Perseroan and FARM 51.

Diversification Opportunities for Perusahaan Perseroan and FARM 51

0.67

Correlation Coefficient

Perusahaan Perseroan  FARM 51

Poor diversification

The 3 months correlation between Perusahaan and FARM is 0.67. Overlapping area represents the amount of risk that can be diversified away by holding Perusahaan Perseroan PT and FARM 51 GROUP in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on FARM 51 GROUP and Perusahaan Perseroan 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 Perusahaan Perseroan PT are associated (or correlated) with FARM 51. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of FARM 51 GROUP has no effect on the direction of Perusahaan Perseroan i.e., Perusahaan Perseroan and FARM 51 go up and down completely randomly.

Pair Corralation between Perusahaan Perseroan and FARM 51

Assuming the 90 days horizon Perusahaan Perseroan PT is expected to under-perform the FARM 51. But the stock apears to be less risky and, when comparing its historical volatility, Perusahaan Perseroan PT is 1.27 times less risky than FARM 51. The stock trades about -0.02 of its potential returns per unit of risk. The FARM 51 GROUP is currently generating about 0.02 of returns per unit of risk over similar time horizon. If you would invest  282.00  in FARM 51 GROUP on September 30, 2024 and sell it today you would earn a total of  10.00  from holding FARM 51 GROUP or generate 3.55% return on investment over 90 days.

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

Perusahaan Perseroan PT  vs.  FARM 51 GROUP

Perusahaan Perseroan

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Perusahaan Perseroan PT has generated negative risk-adjusted returns adding no value to investors with long positions. Despite latest fragile performance, the Stock's basic indicators remain stable and the current disturbance on Wall Street may also be a sign of long-run gains for the company stockholders.

FARM 51 GROUP

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days FARM 51 GROUP has generated negative risk-adjusted returns adding no value to investors with long positions. Despite latest uncertain performance, the Stock's basic indicators remain stable and the current disturbance on Wall Street may also be a sign of long-run gains for the company stockholders.

Pair Trading with Perusahaan Perseroan and FARM 51

The main advantage of trading using opposite Perusahaan Perseroan and FARM 51 positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Perusahaan Perseroan position performs unexpectedly, FARM 51 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 FARM 51 will offset losses from the drop in FARM 51's long position.

The idea behind Perusahaan Perseroan PT and FARM 51 GROUP 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 Premium Stories module to follow Macroaxis premium stories from verified contributors across different equity types, categories and coverage scope.