Correlation Between Argha Karya and Betonjaya Manunggal
Can any of the company-specific risk be diversified away by investing in both Argha Karya and Betonjaya Manunggal 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 Betonjaya Manunggal 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 Betonjaya Manunggal Tbk, you can compare the effects of market volatilities on Argha Karya and Betonjaya Manunggal 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 Betonjaya Manunggal. Check out your portfolio center. Please also check ongoing floating volatility patterns of Argha Karya and Betonjaya Manunggal.
Diversification Opportunities for Argha Karya and Betonjaya Manunggal
0.23 | Correlation Coefficient |
Modest diversification
The 3 months correlation between Argha and Betonjaya is 0.23. Overlapping area represents the amount of risk that can be diversified away by holding Argha Karya Prima and Betonjaya Manunggal Tbk in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Betonjaya Manunggal 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 Betonjaya Manunggal. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Betonjaya Manunggal Tbk has no effect on the direction of Argha Karya i.e., Argha Karya and Betonjaya Manunggal go up and down completely randomly.
Pair Corralation between Argha Karya and Betonjaya Manunggal
Assuming the 90 days trading horizon Argha Karya Prima is expected to under-perform the Betonjaya Manunggal. But the stock apears to be less risky and, when comparing its historical volatility, Argha Karya Prima is 3.68 times less risky than Betonjaya Manunggal. The stock trades about -0.25 of its potential returns per unit of risk. The Betonjaya Manunggal Tbk is currently generating about 0.03 of returns per unit of risk over similar time horizon. If you would invest 38,800 in Betonjaya Manunggal Tbk on August 28, 2024 and sell it today you would earn a total of 0.00 from holding Betonjaya Manunggal Tbk or generate 0.0% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Argha Karya Prima vs. Betonjaya Manunggal Tbk
Performance |
| Timeline |
| Argha Karya Prima |
| Betonjaya Manunggal Tbk |
Argha Karya and Betonjaya Manunggal Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Argha Karya and Betonjaya Manunggal
The main advantage of trading using opposite Argha Karya and Betonjaya Manunggal positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Argha Karya position performs unexpectedly, Betonjaya Manunggal 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 Betonjaya Manunggal will offset losses from the drop in Betonjaya Manunggal's long position.| Argha Karya vs. Kedaung Indah Can | Argha Karya vs. Langgeng Makmur Industri | Argha Karya vs. Kabelindo Murni Tbk | Argha Karya vs. Mustika Ratu Tbk |
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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 Idea Optimizer module to use advanced portfolio builder with pre-computed micro ideas to build optimal portfolio .
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