Correlation Between Parkson Retail and Perusahaan Perseroan

Can any of the company-specific risk be diversified away by investing in both Parkson Retail and Perusahaan Perseroan 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 Parkson Retail and Perusahaan Perseroan into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Parkson Retail Group and Perusahaan Perseroan PT, you can compare the effects of market volatilities on Parkson Retail and Perusahaan Perseroan 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 Parkson Retail with a short position of Perusahaan Perseroan. Check out your portfolio center. Please also check ongoing floating volatility patterns of Parkson Retail and Perusahaan Perseroan.

Diversification Opportunities for Parkson Retail and Perusahaan Perseroan

-0.31

Correlation Coefficient

Parkson Retail  Perusahaan Perseroan

Very good diversification

The 3 months correlation between Parkson and Perusahaan is -0.31. Overlapping area represents the amount of risk that can be diversified away by holding Parkson Retail Group and Perusahaan Perseroan PT in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Perusahaan Perseroan and Parkson Retail 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 Parkson Retail Group are associated (or correlated) with Perusahaan Perseroan. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Perusahaan Perseroan has no effect on the direction of Parkson Retail i.e., Parkson Retail and Perusahaan Perseroan go up and down completely randomly.

Pair Corralation between Parkson Retail and Perusahaan Perseroan

Assuming the 90 days trading horizon Parkson Retail is expected to generate 1.27 times less return on investment than Perusahaan Perseroan. In addition to that, Parkson Retail is 2.29 times more volatile than Perusahaan Perseroan PT. It trades about 0.05 of its total potential returns per unit of risk. Perusahaan Perseroan PT is currently generating about 0.15 per unit of volatility. If you would invest  1,215  in Perusahaan Perseroan PT on April 20, 2025 and sell it today you would earn a total of  245.00  from holding Perusahaan Perseroan PT or generate 20.16% return on investment over 90 days.

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

Parkson Retail Group  vs.  Perusahaan Perseroan PT

Parkson Retail Group

Risk-Adjusted Performance

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in Parkson Retail Group are ranked lower than 4 (%) of all global equities and portfolios over the last 90 days. Despite nearly fragile forward indicators, Parkson Retail reported solid returns over the last few months and may actually be approaching a breakup point.

Perusahaan Perseroan

Risk-Adjusted Performance

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Perusahaan Perseroan PT are ranked lower than 12 (%) of all global equities and portfolios over the last 90 days. Despite nearly fragile basic indicators, Perusahaan Perseroan reported solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Parkson Retail and Perusahaan Perseroan

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

The idea behind Parkson Retail Group and Perusahaan Perseroan PT 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 ETF Categories module to list of ETF categories grouped based on various criteria, such as the investment strategy or type of investments.