Correlation Between Pikko Land and Rockfields Property

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

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

Diversification Opportunities for Pikko Land and Rockfields Property

-0.29

Correlation Coefficient

Pikko Land  Rockfields Property

Very good diversification

The 3 months correlation between Pikko and Rockfields is -0.29. Overlapping area represents the amount of risk that can be diversified away by holding Pikko Land Development and Rockfields Property Indonesia in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Rockfields Property and Pikko Land 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 Pikko Land Development are associated (or correlated) with Rockfields Property. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Rockfields Property has no effect on the direction of Pikko Land i.e., Pikko Land and Rockfields Property go up and down completely randomly.

Pair Corralation between Pikko Land and Rockfields Property

Assuming the 90 days trading horizon Pikko Land Development is expected to under-perform the Rockfields Property. In addition to that, Pikko Land is 1.6 times more volatile than Rockfields Property Indonesia. It trades about -0.01 of its total potential returns per unit of risk. Rockfields Property Indonesia is currently generating about 0.02 per unit of volatility. If you would invest  29,400  in Rockfields Property Indonesia on October 27, 2024 and sell it today you would earn a total of  1,600  from holding Rockfields Property Indonesia or generate 5.44% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Insignificant
Accuracy	99.79%
Values	Daily Returns

Pikko Land Development  vs.  Rockfields Property Indonesia

Pikko Land Development

Risk-Adjusted Performance

6 of 100

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in Pikko Land Development are ranked lower than 6 (%) of all global equities and portfolios over the last 90 days. Despite quite conflicting forward-looking signals, Pikko Land disclosed solid returns over the last few months and may actually be approaching a breakup point.

Rockfields Property

Risk-Adjusted Performance

12 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Rockfields Property Indonesia are ranked lower than 12 (%) of all global equities and portfolios over the last 90 days. Despite quite conflicting forward-looking signals, Rockfields Property may actually be approaching a critical reversion point that can send shares even higher in February 2025.

Pair Trading with Pikko Land and Rockfields Property

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

The idea behind Pikko Land Development and Rockfields Property Indonesia 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 Portfolio Manager module to state of the art Portfolio Manager to monitor and improve performance of your invested capital.