Correlation Between Sekar Laut and Prima Cakrawala

Can any of the company-specific risk be diversified away by investing in both Sekar Laut and Prima Cakrawala 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 Sekar Laut and Prima Cakrawala into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Sekar Laut Tbk and Prima Cakrawala Abadi, you can compare the effects of market volatilities on Sekar Laut and Prima Cakrawala 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 Sekar Laut with a short position of Prima Cakrawala. Check out your portfolio center. Please also check ongoing floating volatility patterns of Sekar Laut and Prima Cakrawala.

Diversification Opportunities for Sekar Laut and Prima Cakrawala

0.0

Correlation Coefficient

Sekar Laut  Prima Cakrawala

Pay attention - limited upside

The 3 months correlation between Sekar and Prima is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding Sekar Laut Tbk and Prima Cakrawala Abadi in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Prima Cakrawala Abadi and Sekar Laut 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 Sekar Laut Tbk are associated (or correlated) with Prima Cakrawala. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Prima Cakrawala Abadi has no effect on the direction of Sekar Laut i.e., Sekar Laut and Prima Cakrawala go up and down completely randomly.

Pair Corralation between Sekar Laut and Prima Cakrawala

If you would invest  5,000  in Prima Cakrawala Abadi on October 12, 2024 and sell it today you would earn a total of  0.00  from holding Prima Cakrawala Abadi or generate 0.0% return on investment over 90 days.

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

Sekar Laut Tbk  vs.  Prima Cakrawala Abadi

Sekar Laut Tbk

Risk-Adjusted Performance

3 of 100

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in Sekar Laut Tbk are ranked lower than 3 (%) of all global equities and portfolios over the last 90 days. Despite quite conflicting forward-looking signals, Sekar Laut disclosed solid returns over the last few months and may actually be approaching a breakup point.

Prima Cakrawala Abadi

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Prima Cakrawala Abadi has generated negative risk-adjusted returns adding no value to investors with long positions. Despite quite persistent forward-looking signals, Prima Cakrawala 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 Sekar Laut and Prima Cakrawala

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

The idea behind Sekar Laut Tbk and Prima Cakrawala Abadi 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 Idea Analyzer module to analyze all characteristics, volatility and risk-adjusted return of Macroaxis ideas.