Correlation Between Pudjiadi Prestige and Pikko Land

Can any of the company-specific risk be diversified away by investing in both Pudjiadi Prestige and Pikko Land 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 Pudjiadi Prestige and Pikko Land into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Pudjiadi Prestige Tbk and Pikko Land Development, you can compare the effects of market volatilities on Pudjiadi Prestige and Pikko Land 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 Pudjiadi Prestige with a short position of Pikko Land. Check out your portfolio center. Please also check ongoing floating volatility patterns of Pudjiadi Prestige and Pikko Land.

Diversification Opportunities for Pudjiadi Prestige and Pikko Land

0.13

Correlation Coefficient

Pudjiadi Prestige  Pikko Land

Average diversification

The 3 months correlation between Pudjiadi and Pikko is 0.13. Overlapping area represents the amount of risk that can be diversified away by holding Pudjiadi Prestige Tbk and Pikko Land Development in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Pikko Land Development and Pudjiadi Prestige 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 Pudjiadi Prestige Tbk are associated (or correlated) with Pikko Land. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Pikko Land Development has no effect on the direction of Pudjiadi Prestige i.e., Pudjiadi Prestige and Pikko Land go up and down completely randomly.

Pair Corralation between Pudjiadi Prestige and Pikko Land

Assuming the 90 days trading horizon Pudjiadi Prestige Tbk is expected to under-perform the Pikko Land. But the stock apears to be less risky and, when comparing its historical volatility, Pudjiadi Prestige Tbk is 1.04 times less risky than Pikko Land. The stock trades about -0.02 of its potential returns per unit of risk. The Pikko Land Development is currently generating about 0.03 of returns per unit of risk over similar time horizon. If you would invest  3,900  in Pikko Land Development on December 31, 2024 and sell it today you would earn a total of  100.00  from holding Pikko Land Development or generate 2.56% return on investment over 90 days.

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

Pudjiadi Prestige Tbk  vs.  Pikko Land Development

Pudjiadi Prestige Tbk

Risk-Adjusted Performance

Very Weak

Over the last 90 days Pudjiadi Prestige Tbk has generated negative risk-adjusted returns adding no value to investors with long positions. Despite quite persistent forward-looking signals, Pudjiadi Prestige is not utilizing all of its potentials. The latest stock price mess, may contribute to short-term losses for the institutional investors.

Pikko Land Development

Risk-Adjusted Performance

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Pikko Land Development are ranked lower than 2 (%) of all global equities and portfolios over the last 90 days. Despite quite conflicting forward-looking signals, Pikko Land may actually be approaching a critical reversion point that can send shares even higher in May 2025.

Pair Trading with Pudjiadi Prestige and Pikko Land

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

The idea behind Pudjiadi Prestige Tbk and Pikko Land Development 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 ETFs module to find actively traded Exchange Traded Funds (ETF) from around the world.