Correlation Between Abm Investama and Hexindo Adiperkasa
Can any of the company-specific risk be diversified away by investing in both Abm Investama and Hexindo Adiperkasa 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 Hexindo Adiperkasa 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 Hexindo Adiperkasa Tbk, you can compare the effects of market volatilities on Abm Investama and Hexindo Adiperkasa 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 Hexindo Adiperkasa. Check out your portfolio center. Please also check ongoing floating volatility patterns of Abm Investama and Hexindo Adiperkasa.
Diversification Opportunities for Abm Investama and Hexindo Adiperkasa
0.83 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Abm and Hexindo is 0.83. Overlapping area represents the amount of risk that can be diversified away by holding Abm Investama Tbk and Hexindo Adiperkasa Tbk in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Hexindo Adiperkasa Tbk 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 Hexindo Adiperkasa. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Hexindo Adiperkasa Tbk has no effect on the direction of Abm Investama i.e., Abm Investama and Hexindo Adiperkasa go up and down completely randomly.
Pair Corralation between Abm Investama and Hexindo Adiperkasa
Assuming the 90 days trading horizon Abm Investama Tbk is expected to generate 1.75 times more return on investment than Hexindo Adiperkasa. However, Abm Investama is 1.75 times more volatile than Hexindo Adiperkasa Tbk. It trades about -0.24 of its potential returns per unit of risk. Hexindo Adiperkasa Tbk is currently generating about -0.62 per unit of risk. If you would invest 402,000 in Abm Investama Tbk on August 24, 2024 and sell it today you would lose (46,000) from holding Abm Investama Tbk or give up 11.44% 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. Hexindo Adiperkasa Tbk
Performance |
| Timeline |
| Abm Investama Tbk |
| Hexindo Adiperkasa Tbk |
Abm Investama and Hexindo Adiperkasa Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Abm Investama and Hexindo Adiperkasa
The main advantage of trading using opposite Abm Investama and Hexindo Adiperkasa positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Abm Investama position performs unexpectedly, Hexindo Adiperkasa 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 Hexindo Adiperkasa will offset losses from the drop in Hexindo Adiperkasa's long position.| Abm Investama vs. Petrosea Tbk | Abm Investama vs. Harum Energy Tbk | Abm Investama vs. Perdana Karya Perkasa | Abm Investama vs. Samindo Resources Tbk |
| Hexindo Adiperkasa vs. Samudera Indonesia Tbk | Hexindo Adiperkasa vs. Steady Safe TBK | Hexindo Adiperkasa vs. Rukun Raharja Tbk | Hexindo Adiperkasa vs. PT Temas Tbk |
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 Top Crypto Exchanges module to search and analyze digital assets across top global cryptocurrency exchanges.
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