Correlation Between Bekasi Fajar and Buana Listya
Can any of the company-specific risk be diversified away by investing in both Bekasi Fajar and Buana Listya 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 Bekasi Fajar and Buana Listya into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Bekasi Fajar Industrial and Buana Listya Tama, you can compare the effects of market volatilities on Bekasi Fajar and Buana Listya 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 Bekasi Fajar with a short position of Buana Listya. Check out your portfolio center. Please also check ongoing floating volatility patterns of Bekasi Fajar and Buana Listya.
Diversification Opportunities for Bekasi Fajar and Buana Listya
0.67 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Bekasi and Buana is 0.67. Overlapping area represents the amount of risk that can be diversified away by holding Bekasi Fajar Industrial and Buana Listya Tama in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Buana Listya Tama and Bekasi Fajar 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 Bekasi Fajar Industrial are associated (or correlated) with Buana Listya. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Buana Listya Tama has no effect on the direction of Bekasi Fajar i.e., Bekasi Fajar and Buana Listya go up and down completely randomly.
Pair Corralation between Bekasi Fajar and Buana Listya
Assuming the 90 days trading horizon Bekasi Fajar is expected to generate 1.7 times less return on investment than Buana Listya. In addition to that, Bekasi Fajar is 1.3 times more volatile than Buana Listya Tama. It trades about 0.07 of its total potential returns per unit of risk. Buana Listya Tama is currently generating about 0.17 per unit of volatility. If you would invest 11,400 in Buana Listya Tama on September 12, 2024 and sell it today you would earn a total of 800.00 from holding Buana Listya Tama or generate 7.02% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 95.45% |
| Values | Daily Returns |
Bekasi Fajar Industrial vs. Buana Listya Tama
Performance |
| Timeline |
| Bekasi Fajar Industrial |
| Buana Listya Tama |
Bekasi Fajar and Buana Listya Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Bekasi Fajar and Buana Listya
The main advantage of trading using opposite Bekasi Fajar and Buana Listya positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Bekasi Fajar position performs unexpectedly, Buana Listya 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 Buana Listya will offset losses from the drop in Buana Listya's long position.| Bekasi Fajar vs. Ciputra Development Tbk | Bekasi Fajar vs. Bumi Serpong Damai | Bekasi Fajar vs. Alam Sutera Realty | Bekasi Fajar vs. Lippo Karawaci Tbk |
| Buana Listya vs. Galva Technologies Tbk | Buana Listya vs. Trinitan Metals and | Buana Listya vs. Siloam International Hospitals | Buana Listya vs. PT UBC Medical |
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 Risk-Return Analysis module to view associations between returns expected from investment and the risk you assume.
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