Correlation Between Argha Karya and Arthavest Tbk
Can any of the company-specific risk be diversified away by investing in both Argha Karya and Arthavest Tbk 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 Arthavest Tbk 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 Arthavest Tbk, you can compare the effects of market volatilities on Argha Karya and Arthavest Tbk 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 Arthavest Tbk. Check out your portfolio center. Please also check ongoing floating volatility patterns of Argha Karya and Arthavest Tbk.
Diversification Opportunities for Argha Karya and Arthavest Tbk
0.56 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Argha and Arthavest is 0.56. Overlapping area represents the amount of risk that can be diversified away by holding Argha Karya Prima and Arthavest Tbk in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Arthavest 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 Arthavest Tbk. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Arthavest Tbk has no effect on the direction of Argha Karya i.e., Argha Karya and Arthavest Tbk go up and down completely randomly.
Pair Corralation between Argha Karya and Arthavest Tbk
Assuming the 90 days trading horizon Argha Karya Prima is expected to generate 2.96 times more return on investment than Arthavest Tbk. However, Argha Karya is 2.96 times more volatile than Arthavest Tbk. It trades about -0.01 of its potential returns per unit of risk. Arthavest Tbk is currently generating about -0.06 per unit of risk. If you would invest 71,000 in Argha Karya Prima on September 1, 2024 and sell it today you would lose (11,000) from holding Argha Karya Prima or give up 15.49% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 99.44% |
| Values | Daily Returns |
Argha Karya Prima vs. Arthavest Tbk
Performance |
| Timeline |
| Argha Karya Prima |
| Arthavest Tbk |
Argha Karya and Arthavest Tbk Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Argha Karya and Arthavest Tbk
The main advantage of trading using opposite Argha Karya and Arthavest Tbk positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Argha Karya position performs unexpectedly, Arthavest Tbk 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 Arthavest Tbk will offset losses from the drop in Arthavest Tbk's long position.| Argha Karya vs. Perusahaan Gas Negara | Argha Karya vs. Telkom Indonesia Tbk | Argha Karya vs. Mitra Pinasthika Mustika | Argha Karya vs. Jakarta Int Hotels |
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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 Equity Analysis module to research over 250,000 global equities including funds, stocks and ETFs to find investment opportunities.
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