Correlation Between Asiaplast Industries and Berlina Tbk
Can any of the company-specific risk be diversified away by investing in both Asiaplast Industries and Berlina 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 Asiaplast Industries and Berlina Tbk into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Asiaplast Industries Tbk and Berlina Tbk, you can compare the effects of market volatilities on Asiaplast Industries and Berlina 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 Asiaplast Industries with a short position of Berlina Tbk. Check out your portfolio center. Please also check ongoing floating volatility patterns of Asiaplast Industries and Berlina Tbk.
Diversification Opportunities for Asiaplast Industries and Berlina Tbk
0.2 | Correlation Coefficient |
Modest diversification
The 3 months correlation between Asiaplast and Berlina is 0.2. Overlapping area represents the amount of risk that can be diversified away by holding Asiaplast Industries Tbk and Berlina Tbk in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Berlina Tbk and Asiaplast Industries 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 Asiaplast Industries Tbk are associated (or correlated) with Berlina Tbk. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Berlina Tbk has no effect on the direction of Asiaplast Industries i.e., Asiaplast Industries and Berlina Tbk go up and down completely randomly.
Pair Corralation between Asiaplast Industries and Berlina Tbk
Assuming the 90 days trading horizon Asiaplast Industries Tbk is expected to generate 1.02 times more return on investment than Berlina Tbk. However, Asiaplast Industries is 1.02 times more volatile than Berlina Tbk. It trades about 0.02 of its potential returns per unit of risk. Berlina Tbk is currently generating about -0.01 per unit of risk. If you would invest 51,515 in Asiaplast Industries Tbk on August 27, 2024 and sell it today you would earn a total of 2,485 from holding Asiaplast Industries Tbk or generate 4.82% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 99.33% |
| Values | Daily Returns |
Asiaplast Industries Tbk vs. Berlina Tbk
Performance |
| Timeline |
| Asiaplast Industries Tbk |
| Berlina Tbk |
Asiaplast Industries and Berlina Tbk Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Asiaplast Industries and Berlina Tbk
The main advantage of trading using opposite Asiaplast Industries and Berlina Tbk positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Asiaplast Industries position performs unexpectedly, Berlina 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 Berlina Tbk will offset losses from the drop in Berlina Tbk's long position.| Asiaplast Industries vs. Argha Karya Prima | Asiaplast Industries vs. Alumindo Light Metal | Asiaplast Industries vs. Anugerah Kagum Karya | Asiaplast Industries vs. Asahimas Flat Glass |
| Berlina Tbk vs. Kedaung Indah Can | Berlina Tbk vs. Langgeng Makmur Industri | Berlina Tbk vs. Kabelindo Murni Tbk | Berlina Tbk vs. Mustika Ratu 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 Portfolio Manager module to state of the art Portfolio Manager to monitor and improve performance of your invested capital.
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