Correlation Between Pembangunan Jaya and Pudjiadi Sons

Can any of the company-specific risk be diversified away by investing in both Pembangunan Jaya and Pudjiadi Sons 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 Pembangunan Jaya and Pudjiadi Sons into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Pembangunan Jaya Ancol and Pudjiadi Sons Tbk, you can compare the effects of market volatilities on Pembangunan Jaya and Pudjiadi Sons 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 Pembangunan Jaya with a short position of Pudjiadi Sons. Check out your portfolio center. Please also check ongoing floating volatility patterns of Pembangunan Jaya and Pudjiadi Sons.

Diversification Opportunities for Pembangunan Jaya and Pudjiadi Sons

-0.4

Correlation Coefficient

Pembangunan Jaya  Pudjiadi Sons

Very good diversification

The 3 months correlation between Pembangunan and Pudjiadi is -0.4. Overlapping area represents the amount of risk that can be diversified away by holding Pembangunan Jaya Ancol and Pudjiadi Sons Tbk in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Pudjiadi Sons Tbk and Pembangunan Jaya 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 Pembangunan Jaya Ancol are associated (or correlated) with Pudjiadi Sons. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Pudjiadi Sons Tbk has no effect on the direction of Pembangunan Jaya i.e., Pembangunan Jaya and Pudjiadi Sons go up and down completely randomly.

Pair Corralation between Pembangunan Jaya and Pudjiadi Sons

If you would invest  45,000  in Pudjiadi Sons Tbk on February 1, 2024 and sell it today you would earn a total of  0.00  from holding Pudjiadi Sons Tbk or generate 0.0% return on investment over 90 days.

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

Pembangunan Jaya Ancol  vs.  Pudjiadi Sons Tbk

Pembangunan Jaya Ancol

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Pembangunan Jaya Ancol 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 basic indicators remain quite persistent which may send shares a bit higher in June 2024. The latest mess may also be a sign of long-standing up-swing for the company institutional investors.

Pudjiadi Sons Tbk

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Pudjiadi Sons Tbk has generated negative risk-adjusted returns adding no value to investors with long positions. Despite quite persistent basic indicators, Pudjiadi Sons 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 Pembangunan Jaya and Pudjiadi Sons

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

The idea behind Pembangunan Jaya Ancol and Pudjiadi Sons Tbk 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 Commodity Directory module to find actively traded commodities issued by global exchanges.