Correlation Between Berkah Beton and PT Indofood
Can any of the company-specific risk be diversified away by investing in both Berkah Beton and PT Indofood 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 Berkah Beton and PT Indofood into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Berkah Beton Sadaya and PT Indofood Sukses, you can compare the effects of market volatilities on Berkah Beton and PT Indofood 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 Berkah Beton with a short position of PT Indofood. Check out your portfolio center. Please also check ongoing floating volatility patterns of Berkah Beton and PT Indofood.
Diversification Opportunities for Berkah Beton and PT Indofood
-0.71 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Berkah and INDF is -0.71. Overlapping area represents the amount of risk that can be diversified away by holding Berkah Beton Sadaya and PT Indofood Sukses in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on PT Indofood Sukses and Berkah Beton 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 Berkah Beton Sadaya are associated (or correlated) with PT Indofood. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of PT Indofood Sukses has no effect on the direction of Berkah Beton i.e., Berkah Beton and PT Indofood go up and down completely randomly.
Pair Corralation between Berkah Beton and PT Indofood
Assuming the 90 days trading horizon Berkah Beton Sadaya is expected to under-perform the PT Indofood. In addition to that, Berkah Beton is 4.88 times more volatile than PT Indofood Sukses. It trades about -0.12 of its total potential returns per unit of risk. PT Indofood Sukses is currently generating about 0.03 per unit of volatility. If you would invest 625,959 in PT Indofood Sukses on August 25, 2024 and sell it today you would earn a total of 121,541 from holding PT Indofood Sukses or generate 19.42% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 99.58% |
| Values | Daily Returns |
Berkah Beton Sadaya vs. PT Indofood Sukses
Performance |
| Timeline |
| Berkah Beton Sadaya |
| PT Indofood Sukses |
Berkah Beton and PT Indofood Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Berkah Beton and PT Indofood
The main advantage of trading using opposite Berkah Beton and PT Indofood positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Berkah Beton position performs unexpectedly, PT Indofood 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 PT Indofood will offset losses from the drop in PT Indofood's long position.| Berkah Beton vs. Bk Harda Internasional | Berkah Beton vs. Bank Net Indonesia | Berkah Beton vs. Bank Yudha Bhakti | Berkah Beton vs. Medikaloka Hermina PT |
| PT Indofood vs. Charoen Pokphand Indonesia | PT Indofood vs. Kalbe Farma Tbk | PT Indofood vs. Indofood Cbp Sukses | PT Indofood vs. Akr Corporindo 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 Price Transformation module to use Price Transformation models to analyze the depth of different equity instruments across global markets.
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