Correlation Between Perusahaan Perseroan and Patterson Companies

Can any of the company-specific risk be diversified away by investing in both Perusahaan Perseroan and Patterson Companies 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 Patterson Companies 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 Patterson Companies, you can compare the effects of market volatilities on Perusahaan Perseroan and Patterson Companies 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 Patterson Companies. Check out your portfolio center. Please also check ongoing floating volatility patterns of Perusahaan Perseroan and Patterson Companies.

Diversification Opportunities for Perusahaan Perseroan and Patterson Companies

-0.33

Correlation Coefficient

Perusahaan Perseroan  Patterson Companies

Very good diversification

The 3 months correlation between Perusahaan and Patterson is -0.33. Overlapping area represents the amount of risk that can be diversified away by holding Perusahaan Perseroan PT and Patterson Companies in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Patterson Companies 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 Patterson Companies. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Patterson Companies has no effect on the direction of Perusahaan Perseroan i.e., Perusahaan Perseroan and Patterson Companies go up and down completely randomly.

Pair Corralation between Perusahaan Perseroan and Patterson Companies

Assuming the 90 days horizon Perusahaan Perseroan PT is expected to under-perform the Patterson Companies. But the stock apears to be less risky and, when comparing its historical volatility, Perusahaan Perseroan PT is 3.57 times less risky than Patterson Companies. The stock trades about -0.07 of its potential returns per unit of risk. The Patterson Companies is currently generating about 0.24 of returns per unit of risk over similar time horizon. If you would invest  2,160  in Patterson Companies on October 10, 2024 and sell it today you would earn a total of  800.00  from holding Patterson Companies or generate 37.04% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Insignificant
Accuracy	94.44%
Values	Daily Returns

Perusahaan Perseroan PT  vs.  Patterson Companies

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 nearly stable basic indicators, Perusahaan Perseroan is not utilizing all of its potentials. The current stock price disturbance, may contribute to mid-run losses for the stockholders.

Patterson Companies

Risk-Adjusted Performance

14 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Patterson Companies are ranked lower than 14 (%) of all global equities and portfolios over the last 90 days. In spite of rather fragile basic indicators, Patterson Companies exhibited solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Perusahaan Perseroan and Patterson Companies

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

The idea behind Perusahaan Perseroan PT and Patterson Companies 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 Positions Ratings module to determine portfolio positions ratings based on digital equity recommendations. Macroaxis instant position ratings are based on combination of fundamental analysis and risk-adjusted market performance.