Correlation Between Rukun Raharja and Perdana Karya

Can any of the company-specific risk be diversified away by investing in both Rukun Raharja and Perdana Karya 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 Rukun Raharja and Perdana Karya into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Rukun Raharja Tbk and Perdana Karya Perkasa, you can compare the effects of market volatilities on Rukun Raharja and Perdana Karya 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 Rukun Raharja with a short position of Perdana Karya. Check out your portfolio center. Please also check ongoing floating volatility patterns of Rukun Raharja and Perdana Karya.

Diversification Opportunities for Rukun Raharja and Perdana Karya

-0.63

Correlation Coefficient

Rukun Raharja  Perdana Karya

Excellent diversification

The 3 months correlation between Rukun and Perdana is -0.63. Overlapping area represents the amount of risk that can be diversified away by holding Rukun Raharja Tbk and Perdana Karya Perkasa in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Perdana Karya Perkasa and Rukun Raharja 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 Rukun Raharja Tbk are associated (or correlated) with Perdana Karya. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Perdana Karya Perkasa has no effect on the direction of Rukun Raharja i.e., Rukun Raharja and Perdana Karya go up and down completely randomly.

Pair Corralation between Rukun Raharja and Perdana Karya

Assuming the 90 days trading horizon Rukun Raharja Tbk is expected to under-perform the Perdana Karya. In addition to that, Rukun Raharja is 2.83 times more volatile than Perdana Karya Perkasa. It trades about -0.03 of its total potential returns per unit of risk. Perdana Karya Perkasa is currently generating about 0.09 per unit of volatility. If you would invest  77,000  in Perdana Karya Perkasa on December 22, 2024 and sell it today you would earn a total of  8,000  from holding Perdana Karya Perkasa or generate 10.39% return on investment over 90 days.

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

Rukun Raharja Tbk  vs.  Perdana Karya Perkasa

Rukun Raharja Tbk

Risk-Adjusted Performance

Very Weak

Over the last 90 days Rukun Raharja Tbk has generated negative risk-adjusted returns adding no value to investors with long positions. Despite latest conflicting performance, the Stock's forward-looking signals remain persistent and the latest mess on Wall Street may also be a sign of long-standing gains for the company institutional investors.

Perdana Karya Perkasa

Risk-Adjusted Performance

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in Perdana Karya Perkasa are ranked lower than 6 (%) of all global equities and portfolios over the last 90 days. Despite quite weak forward-looking signals, Perdana Karya may actually be approaching a critical reversion point that can send shares even higher in April 2025.

Pair Trading with Rukun Raharja and Perdana Karya

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

The idea behind Rukun Raharja Tbk and Perdana Karya Perkasa 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 Center module to all portfolio management and optimization tools to improve performance of your portfolios.