Correlation Between Abm Investama and Baramulti Suksessarana
Can any of the company-specific risk be diversified away by investing in both Abm Investama and Baramulti Suksessarana 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 Abm Investama and Baramulti Suksessarana into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Abm Investama Tbk and Baramulti Suksessarana Tbk, you can compare the effects of market volatilities on Abm Investama and Baramulti Suksessarana 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 Abm Investama with a short position of Baramulti Suksessarana. Check out your portfolio center. Please also check ongoing floating volatility patterns of Abm Investama and Baramulti Suksessarana.
Diversification Opportunities for Abm Investama and Baramulti Suksessarana
0.81 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Abm and Baramulti is 0.81. Overlapping area represents the amount of risk that can be diversified away by holding Abm Investama Tbk and Baramulti Suksessarana Tbk in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Baramulti Suksessarana and Abm Investama 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 Abm Investama Tbk are associated (or correlated) with Baramulti Suksessarana. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Baramulti Suksessarana has no effect on the direction of Abm Investama i.e., Abm Investama and Baramulti Suksessarana go up and down completely randomly.
Pair Corralation between Abm Investama and Baramulti Suksessarana
Assuming the 90 days trading horizon Abm Investama Tbk is expected to under-perform the Baramulti Suksessarana. In addition to that, Abm Investama is 1.54 times more volatile than Baramulti Suksessarana Tbk. It trades about -0.2 of its total potential returns per unit of risk. Baramulti Suksessarana Tbk is currently generating about -0.23 per unit of volatility. If you would invest 452,891 in Baramulti Suksessarana Tbk on August 30, 2024 and sell it today you would lose (31,891) from holding Baramulti Suksessarana Tbk or give up 7.04% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Abm Investama Tbk vs. Baramulti Suksessarana Tbk
Performance |
| Timeline |
| Abm Investama Tbk |
| Baramulti Suksessarana |
Abm Investama and Baramulti Suksessarana Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Abm Investama and Baramulti Suksessarana
The main advantage of trading using opposite Abm Investama and Baramulti Suksessarana positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Abm Investama position performs unexpectedly, Baramulti Suksessarana 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 Baramulti Suksessarana will offset losses from the drop in Baramulti Suksessarana's long position.| Abm Investama vs. Baramulti Suksessarana Tbk | Abm Investama vs. Mitrabara Adiperdana PT | Abm Investama vs. Sumber Alfaria Trijaya | Abm Investama vs. Surya Esa Perkasa |
| Baramulti Suksessarana vs. Mitrabara Adiperdana PT | Baramulti Suksessarana vs. Bayan Resources Tbk | Baramulti Suksessarana vs. Abm Investama Tbk | Baramulti Suksessarana vs. TBS Energi Utama |
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 Competition Analyzer module to analyze and compare many basic indicators for a group of related or unrelated entities.
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