Correlation Between Pioneerindo Gourmet and PT Indo

Can any of the company-specific risk be diversified away by investing in both Pioneerindo Gourmet and PT Indo 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 Pioneerindo Gourmet and PT Indo into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Pioneerindo Gourmet International and PT Indo Boga, you can compare the effects of market volatilities on Pioneerindo Gourmet and PT Indo 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 Pioneerindo Gourmet with a short position of PT Indo. Check out your portfolio center. Please also check ongoing floating volatility patterns of Pioneerindo Gourmet and PT Indo.

Diversification Opportunities for Pioneerindo Gourmet and PT Indo

0.95

Correlation Coefficient

Pioneerindo Gourmet  PT Indo

Almost no diversification

The 3 months correlation between Pioneerindo and IBOS is 0.95. Overlapping area represents the amount of risk that can be diversified away by holding Pioneerindo Gourmet Internatio and PT Indo Boga in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on PT Indo Boga and Pioneerindo Gourmet 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 Pioneerindo Gourmet International are associated (or correlated) with PT Indo. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of PT Indo Boga has no effect on the direction of Pioneerindo Gourmet i.e., Pioneerindo Gourmet and PT Indo go up and down completely randomly.

Pair Corralation between Pioneerindo Gourmet and PT Indo

Assuming the 90 days trading horizon Pioneerindo Gourmet International is expected to generate 0.84 times more return on investment than PT Indo. However, Pioneerindo Gourmet International is 1.18 times less risky than PT Indo. It trades about 0.0 of its potential returns per unit of risk. PT Indo Boga is currently generating about -0.11 per unit of risk. If you would invest  97,000  in Pioneerindo Gourmet International on October 10, 2024 and sell it today you would lose (9,500) from holding Pioneerindo Gourmet International or give up 9.79% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Very Strong
Accuracy	99.19%
Values	Daily Returns

Pioneerindo Gourmet Internatio  vs.  PT Indo Boga

Pioneerindo Gourmet

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Pioneerindo Gourmet International has generated negative risk-adjusted returns adding no value to investors with long positions. Despite conflicting performance in the last few months, the Stock's forward-looking signals remain quite persistent which may send shares a bit higher in February 2025. The latest mess may also be a sign of long-standing up-swing for the company institutional investors.

PT Indo Boga

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days PT Indo Boga has generated negative risk-adjusted returns adding no value to investors with long positions. Despite conflicting performance in the last few months, the Stock's forward-looking signals remain quite persistent which may send shares a bit higher in February 2025. The latest mess may also be a sign of long-standing up-swing for the company institutional investors.

Pair Trading with Pioneerindo Gourmet and PT Indo

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

The idea behind Pioneerindo Gourmet International and PT Indo Boga 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 Sync Your Broker module to sync your existing holdings, watchlists, positions or portfolios from thousands of online brokerage services, banks, investment account aggregators and robo-advisors..