Correlation Between Arthavest Tbk and Argha Karya
Can any of the company-specific risk be diversified away by investing in both Arthavest Tbk and Argha Karya 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 Arthavest Tbk and Argha Karya into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Arthavest Tbk and Argha Karya Prima, you can compare the effects of market volatilities on Arthavest Tbk and Argha Karya 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 Arthavest Tbk with a short position of Argha Karya. Check out your portfolio center. Please also check ongoing floating volatility patterns of Arthavest Tbk and Argha Karya.
Diversification Opportunities for Arthavest Tbk and Argha Karya
0.56 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Arthavest and Argha is 0.56. Overlapping area represents the amount of risk that can be diversified away by holding Arthavest Tbk and Argha Karya Prima in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Argha Karya Prima and Arthavest Tbk 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 Arthavest Tbk are associated (or correlated) with Argha Karya. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Argha Karya Prima has no effect on the direction of Arthavest Tbk i.e., Arthavest Tbk and Argha Karya go up and down completely randomly.
Pair Corralation between Arthavest Tbk and Argha Karya
Assuming the 90 days trading horizon Arthavest Tbk is expected to under-perform the Argha Karya. But the stock apears to be less risky and, when comparing its historical volatility, Arthavest Tbk is 2.96 times less risky than Argha Karya. The stock trades about -0.06 of its potential returns per unit of risk. The Argha Karya Prima is currently generating about -0.01 of returns per unit of risk over similar time horizon. 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 |
Arthavest Tbk vs. Argha Karya Prima
Performance |
| Timeline |
| Arthavest Tbk |
| Argha Karya Prima |
Arthavest Tbk and Argha Karya Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Arthavest Tbk and Argha Karya
The main advantage of trading using opposite Arthavest Tbk and Argha Karya positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Arthavest Tbk position performs unexpectedly, Argha Karya 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 Argha Karya will offset losses from the drop in Argha Karya's long position.| Arthavest Tbk vs. Japfa Comfeed Indonesia | Arthavest Tbk vs. Charoen Pokphand Indonesia | Arthavest Tbk vs. Erajaya Swasembada Tbk | Arthavest Tbk vs. Indofood Cbp Sukses |
| Argha Karya vs. Perusahaan Gas Negara | Argha Karya vs. Telkom Indonesia Tbk | Argha Karya vs. Mitra Pinasthika Mustika | Argha Karya vs. Jakarta Int Hotels |
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 Price Exposure Probability module to analyze equity upside and downside potential for a given time horizon across multiple markets.
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