Correlation Between Rockfields Property and Puri Global

Can any of the company-specific risk be diversified away by investing in both Rockfields Property and Puri Global 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 Rockfields Property and Puri Global into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Rockfields Property Indonesia and Puri Global Sukses, you can compare the effects of market volatilities on Rockfields Property and Puri Global 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 Rockfields Property with a short position of Puri Global. Check out your portfolio center. Please also check ongoing floating volatility patterns of Rockfields Property and Puri Global.

Diversification Opportunities for Rockfields Property and Puri Global

-0.34

Correlation Coefficient

Rockfields Property  Puri Global

Very good diversification

The 3 months correlation between Rockfields and Puri is -0.34. Overlapping area represents the amount of risk that can be diversified away by holding Rockfields Property Indonesia and Puri Global Sukses in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Puri Global Sukses and Rockfields Property 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 Rockfields Property Indonesia are associated (or correlated) with Puri Global. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Puri Global Sukses has no effect on the direction of Rockfields Property i.e., Rockfields Property and Puri Global go up and down completely randomly.

Pair Corralation between Rockfields Property and Puri Global

Assuming the 90 days trading horizon Rockfields Property Indonesia is expected to generate 0.63 times more return on investment than Puri Global. However, Rockfields Property Indonesia is 1.58 times less risky than Puri Global. It trades about 0.13 of its potential returns per unit of risk. Puri Global Sukses is currently generating about 0.01 per unit of risk. If you would invest  27,800  in Rockfields Property Indonesia on December 22, 2024 and sell it today you would earn a total of  9,200  from holding Rockfields Property Indonesia or generate 33.09% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Insignificant
Accuracy	98.31%
Values	Daily Returns

Rockfields Property Indonesia  vs.  Puri Global Sukses

Rockfields Property

Risk-Adjusted Performance

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Rockfields Property Indonesia are ranked lower than 10 (%) of all global equities and portfolios over the last 90 days. Despite quite weak forward-looking signals, Rockfields Property disclosed solid returns over the last few months and may actually be approaching a breakup point.

Puri Global Sukses

Risk-Adjusted Performance

Very Weak

Over the last 90 days Puri Global Sukses has generated negative risk-adjusted returns adding no value to investors with long positions. Despite quite persistent forward-looking signals, Puri Global 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 Rockfields Property and Puri Global

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

The idea behind Rockfields Property Indonesia and Puri Global Sukses 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 Crypto Correlations module to use cryptocurrency correlation module to diversify your cryptocurrency portfolio across multiple coins.