Correlation Between PT Hatten and Pacific Strategic

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

By analyzing existing cross correlation between PT Hatten Bali and Pacific Strategic Financial, you can compare the effects of market volatilities on PT Hatten and Pacific Strategic 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 Hatten with a short position of Pacific Strategic. Check out your portfolio center. Please also check ongoing floating volatility patterns of PT Hatten and Pacific Strategic.

Diversification Opportunities for PT Hatten and Pacific Strategic

0.25

Correlation Coefficient

PT Hatten  Pacific Strategic

Modest diversification

The 3 months correlation between WINE and Pacific is 0.25. Overlapping area represents the amount of risk that can be diversified away by holding PT Hatten Bali and Pacific Strategic Financial in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Pacific Strategic and PT Hatten 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 Hatten Bali are associated (or correlated) with Pacific Strategic. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Pacific Strategic has no effect on the direction of PT Hatten i.e., PT Hatten and Pacific Strategic go up and down completely randomly.

Pair Corralation between PT Hatten and Pacific Strategic

Assuming the 90 days trading horizon PT Hatten Bali is expected to under-perform the Pacific Strategic. In addition to that, PT Hatten is 3.66 times more volatile than Pacific Strategic Financial. It trades about -0.04 of its total potential returns per unit of risk. Pacific Strategic Financial is currently generating about -0.05 per unit of volatility. If you would invest  109,500  in Pacific Strategic Financial on December 30, 2024 and sell it today you would lose (6,000) from holding Pacific Strategic Financial or give up 5.48% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Very Weak
Accuracy	100.0%
Values	Daily Returns

PT Hatten Bali  vs.  Pacific Strategic Financial

PT Hatten Bali

Risk-Adjusted Performance

Very Weak

Over the last 90 days PT Hatten Bali has generated negative risk-adjusted returns adding no value to investors with long positions. Despite conflicting performance in the last few months, the Stock's forward-looking signals remain quite persistent which may send shares a bit higher in April 2025. The latest mess may also be a sign of long-standing up-swing for the company institutional investors.

Pacific Strategic

Risk-Adjusted Performance

Very Weak

Over the last 90 days Pacific Strategic Financial has generated negative risk-adjusted returns adding no value to investors with long positions. Despite quite persistent forward-looking signals, Pacific Strategic 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 PT Hatten and Pacific Strategic

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

The idea behind PT Hatten Bali and Pacific Strategic Financial 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 Fundamentals Comparison module to compare fundamentals across multiple equities to find investing opportunities.