Correlation Between PT Arkora and Habco Trans
Can any of the company-specific risk be diversified away by investing in both PT Arkora and Habco Trans 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 PT Arkora and Habco Trans into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between PT Arkora Hydro and Habco Trans Maritima, you can compare the effects of market volatilities on PT Arkora and Habco Trans 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 PT Arkora with a short position of Habco Trans. Check out your portfolio center. Please also check ongoing floating volatility patterns of PT Arkora and Habco Trans.
Diversification Opportunities for PT Arkora and Habco Trans
0.02 | Correlation Coefficient |
Significant diversification
The 3 months correlation between ARKO and Habco is 0.02. Overlapping area represents the amount of risk that can be diversified away by holding PT Arkora Hydro and Habco Trans Maritima in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Habco Trans Maritima and PT Arkora 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 PT Arkora Hydro are associated (or correlated) with Habco Trans. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Habco Trans Maritima has no effect on the direction of PT Arkora i.e., PT Arkora and Habco Trans go up and down completely randomly.
Pair Corralation between PT Arkora and Habco Trans
Assuming the 90 days trading horizon PT Arkora Hydro is expected to under-perform the Habco Trans. But the stock apears to be less risky and, when comparing its historical volatility, PT Arkora Hydro is 1.14 times less risky than Habco Trans. The stock trades about -0.1 of its potential returns per unit of risk. The Habco Trans Maritima is currently generating about -0.07 of returns per unit of risk over similar time horizon. If you would invest 30,800 in Habco Trans Maritima on September 2, 2024 and sell it today you would lose (2,000) from holding Habco Trans Maritima or give up 6.49% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
PT Arkora Hydro vs. Habco Trans Maritima
Performance |
| Timeline |
| PT Arkora Hydro |
| Habco Trans Maritima |
PT Arkora and Habco Trans Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with PT Arkora and Habco Trans
The main advantage of trading using opposite PT Arkora and Habco Trans positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if PT Arkora position performs unexpectedly, Habco Trans 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 Habco Trans will offset losses from the drop in Habco Trans' long position.| PT Arkora vs. PT Dewi Shri | PT Arkora vs. Adaro Minerals Indonesia | PT Arkora vs. PT Cilacap Samudera | PT Arkora vs. Habco Trans Maritima |
| Habco Trans vs. Transcoal Pacific Tbk | Habco Trans vs. PT Temas Tbk | Habco Trans vs. Samudera Indonesia Tbk | Habco Trans vs. Pelita Samudera Shipping |
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 Pattern Recognition module to use different Pattern Recognition models to time the market across multiple global exchanges.
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