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

0.63

Correlation Coefficient

Perusahaan Perseroan  Patterson Companies

Poor diversification

The 3 months correlation between Perusahaan and Patterson is 0.63. 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. In addition to that, Perusahaan Perseroan is 2.29 times more volatile than Patterson Companies. It trades about -0.13 of its total potential returns per unit of risk. Patterson Companies is currently generating about -0.06 per unit of volatility. If you would invest  2,940  in Patterson Companies on December 24, 2024 and sell it today you would lose (100.00) from holding Patterson Companies or give up 3.4% of portfolio value over 90 days.

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

Perusahaan Perseroan PT  vs.  Patterson Companies

Perusahaan Perseroan

Risk-Adjusted Performance

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 uncertain performance in the last few months, the Stock's basic indicators remain nearly stable which may send shares a bit higher in April 2025. The current disturbance may also be a sign of long-run up-swing for the company stockholders.

Patterson Companies

Risk-Adjusted Performance

Very Weak

Over the last 90 days Patterson Companies has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of comparatively stable basic indicators, Patterson Companies is not utilizing all of its potentials. The newest stock price uproar, may contribute to short-horizon losses for the private investors.

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 Volatility Analysis module to get historical volatility and risk analysis based on latest market data.