Correlation Between Argha Karya and Arwana Citramulia
Can any of the company-specific risk be diversified away by investing in both Argha Karya and Arwana Citramulia 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 Argha Karya and Arwana Citramulia into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Argha Karya Prima and Arwana Citramulia Tbk, you can compare the effects of market volatilities on Argha Karya and Arwana Citramulia 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 Argha Karya with a short position of Arwana Citramulia. Check out your portfolio center. Please also check ongoing floating volatility patterns of Argha Karya and Arwana Citramulia.
Diversification Opportunities for Argha Karya and Arwana Citramulia
-0.11 | Correlation Coefficient |
Good diversification
The 3 months correlation between Argha and Arwana is -0.11. Overlapping area represents the amount of risk that can be diversified away by holding Argha Karya Prima and Arwana Citramulia Tbk in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Arwana Citramulia Tbk and Argha Karya 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 Argha Karya Prima are associated (or correlated) with Arwana Citramulia. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Arwana Citramulia Tbk has no effect on the direction of Argha Karya i.e., Argha Karya and Arwana Citramulia go up and down completely randomly.
Pair Corralation between Argha Karya and Arwana Citramulia
Assuming the 90 days trading horizon Argha Karya Prima is expected to under-perform the Arwana Citramulia. In addition to that, Argha Karya is 1.98 times more volatile than Arwana Citramulia Tbk. It trades about -0.04 of its total potential returns per unit of risk. Arwana Citramulia Tbk is currently generating about -0.02 per unit of volatility. If you would invest 89,679 in Arwana Citramulia Tbk on August 31, 2024 and sell it today you would lose (15,679) from holding Arwana Citramulia Tbk or give up 17.48% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Argha Karya Prima vs. Arwana Citramulia Tbk
Performance |
| Timeline |
| Argha Karya Prima |
| Arwana Citramulia Tbk |
Argha Karya and Arwana Citramulia Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Argha Karya and Arwana Citramulia
The main advantage of trading using opposite Argha Karya and Arwana Citramulia positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Argha Karya position performs unexpectedly, Arwana Citramulia 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 Arwana Citramulia will offset losses from the drop in Arwana Citramulia's long position.| Argha Karya vs. Asiaplast Industries Tbk | Argha Karya vs. Alumindo Light Metal | Argha Karya vs. Berlina Tbk | Argha Karya vs. Anugerah Kagum Karya |
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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 Sync Your Broker module to sync your existing holdings, watchlists, positions or portfolios from thousands of online brokerage services, banks, investment account aggregators and robo-advisors..
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