Correlation Between PT Boston and Alumindo Light

Specify exactly 2 symbols:
Can any of the company-specific risk be diversified away by investing in both PT Boston and Alumindo Light 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 PT Boston and Alumindo Light into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between PT Boston Furniture and Alumindo Light Metal, you can compare the effects of market volatilities on PT Boston and Alumindo Light 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 PT Boston with a short position of Alumindo Light. Check out your portfolio center. Please also check ongoing floating volatility patterns of PT Boston and Alumindo Light.

Diversification Opportunities for PT Boston and Alumindo Light

0.0
  Correlation Coefficient

Pay attention - limited upside

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

Pair Corralation between PT Boston and Alumindo Light

If you would invest  3,900  in PT Boston Furniture on December 1, 2024 and sell it today you would earn a total of  600.00  from holding PT Boston Furniture or generate 15.38% return on investment over 90 days.
Time Period3 Months [change]
DirectionFlat 
StrengthInsignificant
Accuracy100.0%
ValuesDaily Returns

PT Boston Furniture  vs.  Alumindo Light Metal

 Performance 
       Timeline  
PT Boston Furniture 

Risk-Adjusted Performance

Modest

 
Weak
 
Strong
Compared to the overall equity markets, risk-adjusted returns on investments in PT Boston Furniture are ranked lower than 5 (%) of all global equities and portfolios over the last 90 days. Despite quite conflicting forward-looking signals, PT Boston disclosed solid returns over the last few months and may actually be approaching a breakup point.
Alumindo Light Metal 

Risk-Adjusted Performance

Very Weak

 
Weak
 
Strong
Over the last 90 days Alumindo Light Metal has generated negative risk-adjusted returns adding no value to investors with long positions. Despite quite persistent forward-looking signals, Alumindo Light is not utilizing all of its potentials. The latest stock price mess, may contribute to short-term losses for the institutional investors.

PT Boston and Alumindo Light Volatility Contrast

   Predicted Return Density   
       Returns  

Pair Trading with PT Boston and Alumindo Light

The main advantage of trading using opposite PT Boston and Alumindo Light positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if PT Boston position performs unexpectedly, Alumindo Light 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 Alumindo Light will offset losses from the drop in Alumindo Light's long position.
The idea behind PT Boston Furniture and Alumindo Light Metal 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 Sectors module to list of equity sectors categorizing publicly traded companies based on their primary business activities.

Other Complementary Tools

Efficient Frontier
Plot and analyze your portfolio and positions against risk-return landscape of the market.
Money Flow Index
Determine momentum by analyzing Money Flow Index and other technical indicators
Equity Forecasting
Use basic forecasting models to generate price predictions and determine price momentum
Price Transformation
Use Price Transformation models to analyze the depth of different equity instruments across global markets
Portfolio Anywhere
Track or share privately all of your investments from the convenience of any device