Correlation Between Bayu Buana and Argha Karya
Can any of the company-specific risk be diversified away by investing in both Bayu Buana 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 Bayu Buana and Argha Karya into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Bayu Buana Tbk and Argha Karya Prima, you can compare the effects of market volatilities on Bayu Buana 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 Bayu Buana with a short position of Argha Karya. Check out your portfolio center. Please also check ongoing floating volatility patterns of Bayu Buana and Argha Karya.
Diversification Opportunities for Bayu Buana and Argha Karya
0.32 | Correlation Coefficient |
Weak diversification
The 3 months correlation between Bayu and Argha is 0.32. Overlapping area represents the amount of risk that can be diversified away by holding Bayu Buana 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 Bayu Buana 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 Bayu Buana 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 Bayu Buana i.e., Bayu Buana and Argha Karya go up and down completely randomly.
Pair Corralation between Bayu Buana and Argha Karya
Assuming the 90 days trading horizon Bayu Buana Tbk is expected to generate 0.54 times more return on investment than Argha Karya. However, Bayu Buana Tbk is 1.84 times less risky than Argha Karya. It trades about 0.02 of its potential returns per unit of risk. Argha Karya Prima is currently generating about -0.01 per unit of risk. If you would invest 130,418 in Bayu Buana Tbk on September 1, 2024 and sell it today you would earn a total of 3,582 from holding Bayu Buana Tbk or generate 2.75% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Bayu Buana Tbk vs. Argha Karya Prima
Performance |
| Timeline |
| Bayu Buana Tbk |
| Argha Karya Prima |
Bayu Buana and Argha Karya Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Bayu Buana and Argha Karya
The main advantage of trading using opposite Bayu Buana and Argha Karya positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Bayu Buana 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.| Bayu Buana vs. Japfa Comfeed Indonesia | Bayu Buana vs. Charoen Pokphand Indonesia | Bayu Buana vs. Erajaya Swasembada Tbk | Bayu Buana 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 Transformation module to use Price Transformation models to analyze the depth of different equity instruments across global markets.
Other Complementary Tools
| Commodity Channel Use Commodity Channel Index to analyze current equity momentum | |
| Transaction History View history of all your transactions and understand their impact on performance | |
| Efficient Frontier Plot and analyze your portfolio and positions against risk-return landscape of the market. | |
| Bonds Directory Find actively traded corporate debentures issued by US companies | |
| Equity Valuation Check real value of public entities based on technical and fundamental data |