Correlation Between PT Pelayaran and Minna Padi

Can any of the company-specific risk be diversified away by investing in both PT Pelayaran and Minna Padi 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 Pelayaran and Minna Padi into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between PT Pelayaran Tamarin and Minna Padi Investama, you can compare the effects of market volatilities on PT Pelayaran and Minna Padi 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 Pelayaran with a short position of Minna Padi. Check out your portfolio center. Please also check ongoing floating volatility patterns of PT Pelayaran and Minna Padi.

Diversification Opportunities for PT Pelayaran and Minna Padi

-0.02

Correlation Coefficient

PT Pelayaran  Minna Padi

Good diversification

The 3 months correlation between TAMU and Minna is -0.02. Overlapping area represents the amount of risk that can be diversified away by holding PT Pelayaran Tamarin and Minna Padi Investama in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Minna Padi Investama and PT Pelayaran 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 Pelayaran Tamarin are associated (or correlated) with Minna Padi. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Minna Padi Investama has no effect on the direction of PT Pelayaran i.e., PT Pelayaran and Minna Padi go up and down completely randomly.

Pair Corralation between PT Pelayaran and Minna Padi

Assuming the 90 days trading horizon PT Pelayaran is expected to generate 25.26 times less return on investment than Minna Padi. But when comparing it to its historical volatility, PT Pelayaran Tamarin is 1.36 times less risky than Minna Padi. It trades about 0.02 of its potential returns per unit of risk. Minna Padi Investama is currently generating about 0.44 of returns per unit of risk over similar time horizon. If you would invest  1,000.00  in Minna Padi Investama on December 29, 2024 and sell it today you would earn a total of  3,700  from holding Minna Padi Investama or generate 370.0% return on investment over 90 days.

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

PT Pelayaran Tamarin  vs.  Minna Padi Investama

PT Pelayaran Tamarin

Risk-Adjusted Performance

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in PT Pelayaran Tamarin are ranked lower than 1 (%) of all global equities and portfolios over the last 90 days. Despite quite conflicting forward-looking signals, PT Pelayaran may actually be approaching a critical reversion point that can send shares even higher in April 2025.

Minna Padi Investama

Risk-Adjusted Performance

Very Strong

Compared to the overall equity markets, risk-adjusted returns on investments in Minna Padi Investama are ranked lower than 34 (%) of all global equities and portfolios over the last 90 days. Despite quite conflicting forward-looking signals, Minna Padi disclosed solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with PT Pelayaran and Minna Padi

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

The idea behind PT Pelayaran Tamarin and Minna Padi Investama 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 Efficient Frontier module to plot and analyze your portfolio and positions against risk-return landscape of the market..