Correlation Between Perusahaan Perseroan and SOLOCAL GROUP

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

Diversification Opportunities for Perusahaan Perseroan and SOLOCAL GROUP

-0.68

Correlation Coefficient

Perusahaan Perseroan  SOLOCAL GROUP

Excellent diversification

The 3 months correlation between Perusahaan and SOLOCAL is -0.68. Overlapping area represents the amount of risk that can be diversified away by holding Perusahaan Perseroan PT and SOLOCAL GROUP in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on SOLOCAL 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 SOLOCAL GROUP. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of SOLOCAL GROUP has no effect on the direction of Perusahaan Perseroan i.e., Perusahaan Perseroan and SOLOCAL GROUP go up and down completely randomly.

Pair Corralation between Perusahaan Perseroan and SOLOCAL GROUP

Assuming the 90 days horizon Perusahaan Perseroan PT is expected to generate 1.47 times more return on investment than SOLOCAL GROUP. However, Perusahaan Perseroan is 1.47 times more volatile than SOLOCAL GROUP. It trades about -0.11 of its potential returns per unit of risk. SOLOCAL GROUP is currently generating about -0.75 per unit of risk. If you would invest  1,600  in Perusahaan Perseroan PT on September 26, 2024 and sell it today you would lose (80.00) from holding Perusahaan Perseroan PT or give up 5.0% of portfolio value over 90 days.

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

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

SOLOCAL GROUP

Risk-Adjusted Performance

8 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in SOLOCAL GROUP are ranked lower than 8 (%) of all global equities and portfolios over the last 90 days. In spite of rather uncertain basic indicators, SOLOCAL GROUP exhibited solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Perusahaan Perseroan and SOLOCAL GROUP

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

The idea behind Perusahaan Perseroan PT and SOLOCAL 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.

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 Technical Analysis module to check basic technical indicators and analysis based on most latest market data.