Correlation Between Pudjiadi Prestige and Pt Pakuan

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

Diversification Opportunities for Pudjiadi Prestige and Pt Pakuan

-0.17

Correlation Coefficient

Pudjiadi Prestige  Pt Pakuan

Good diversification

The 3 months correlation between Pudjiadi and UANG is -0.17. Overlapping area represents the amount of risk that can be diversified away by holding Pudjiadi Prestige Tbk and Pt Pakuan Tbk in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Pt Pakuan Tbk 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 Pt Pakuan. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Pt Pakuan Tbk has no effect on the direction of Pudjiadi Prestige i.e., Pudjiadi Prestige and Pt Pakuan go up and down completely randomly.

Pair Corralation between Pudjiadi Prestige and Pt Pakuan

If you would invest  73,500  in Pt Pakuan Tbk on October 12, 2024 and sell it today you would earn a total of  0.00  from holding Pt Pakuan Tbk or generate 0.0% return on investment over 90 days.

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

Pudjiadi Prestige Tbk  vs.  Pt Pakuan Tbk

Pudjiadi Prestige Tbk

Risk-Adjusted Performance

2 of 100

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Pudjiadi Prestige Tbk are ranked lower than 2 (%) of all global equities and portfolios over the last 90 days. Despite quite conflicting forward-looking signals, Pudjiadi Prestige disclosed solid returns over the last few months and may actually be approaching a breakup point.

Pt Pakuan Tbk

Risk-Adjusted Performance

0 of 100

Very Weak

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

Pair Trading with Pudjiadi Prestige and Pt Pakuan

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

The idea behind Pudjiadi Prestige Tbk and Pt Pakuan Tbk 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 Portfolio Manager module to state of the art Portfolio Manager to monitor and improve performance of your invested capital.