Correlation Between Ricky Putra and Asia Pacific

Can any of the company-specific risk be diversified away by investing in both Ricky Putra and Asia Pacific 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 Ricky Putra and Asia Pacific into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Ricky Putra Globalindo and Asia Pacific Fibers, you can compare the effects of market volatilities on Ricky Putra and Asia Pacific 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 Ricky Putra with a short position of Asia Pacific. Check out your portfolio center. Please also check ongoing floating volatility patterns of Ricky Putra and Asia Pacific.

Diversification Opportunities for Ricky Putra and Asia Pacific

0.77

Correlation Coefficient

Ricky Putra  Asia Pacific

Poor diversification

The 3 months correlation between Ricky and Asia is 0.77. Overlapping area represents the amount of risk that can be diversified away by holding Ricky Putra Globalindo and Asia Pacific Fibers in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Asia Pacific Fibers and Ricky Putra 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 Ricky Putra Globalindo are associated (or correlated) with Asia Pacific. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Asia Pacific Fibers has no effect on the direction of Ricky Putra i.e., Ricky Putra and Asia Pacific go up and down completely randomly.

Pair Corralation between Ricky Putra and Asia Pacific

Assuming the 90 days trading horizon Ricky Putra Globalindo is expected to under-perform the Asia Pacific. But the stock apears to be less risky and, when comparing its historical volatility, Ricky Putra Globalindo is 2.07 times less risky than Asia Pacific. The stock trades about -0.23 of its potential returns per unit of risk. The Asia Pacific Fibers is currently generating about 0.14 of returns per unit of risk over similar time horizon. If you would invest  1,800  in Asia Pacific Fibers on September 5, 2024 and sell it today you would earn a total of  200.00  from holding Asia Pacific Fibers or generate 11.11% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Significant
Accuracy	95.45%
Values	Daily Returns

Ricky Putra Globalindo  vs.  Asia Pacific Fibers

Ricky Putra Globalindo

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Ricky Putra Globalindo 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 January 2025. The latest mess may also be a sign of long-standing up-swing for the company institutional investors.

Asia Pacific Fibers

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Asia Pacific Fibers 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 January 2025. The latest mess may also be a sign of long-standing up-swing for the company institutional investors.

Pair Trading with Ricky Putra and Asia Pacific

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

The idea behind Ricky Putra Globalindo and Asia Pacific Fibers 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 Cryptocurrency Center module to build and monitor diversified portfolio of extremely risky digital assets and cryptocurrency.