Correlation Between Bekasi Fajar and Puradelta Lestari
Can any of the company-specific risk be diversified away by investing in both Bekasi Fajar and Puradelta Lestari 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 Puradelta Lestari 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 Puradelta Lestari PT, you can compare the effects of market volatilities on Bekasi Fajar and Puradelta Lestari 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 Puradelta Lestari. Check out your portfolio center. Please also check ongoing floating volatility patterns of Bekasi Fajar and Puradelta Lestari.
Diversification Opportunities for Bekasi Fajar and Puradelta Lestari
0.81 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Bekasi and Puradelta is 0.81. Overlapping area represents the amount of risk that can be diversified away by holding Bekasi Fajar Industrial and Puradelta Lestari PT in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Puradelta Lestari 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 Puradelta Lestari. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Puradelta Lestari has no effect on the direction of Bekasi Fajar i.e., Bekasi Fajar and Puradelta Lestari go up and down completely randomly.
Pair Corralation between Bekasi Fajar and Puradelta Lestari
Assuming the 90 days trading horizon Bekasi Fajar Industrial is expected to under-perform the Puradelta Lestari. In addition to that, Bekasi Fajar is 2.64 times more volatile than Puradelta Lestari PT. It trades about -0.06 of its total potential returns per unit of risk. Puradelta Lestari PT is currently generating about -0.06 per unit of volatility. If you would invest 14,900 in Puradelta Lestari PT on October 21, 2024 and sell it today you would lose (100.00) from holding Puradelta Lestari PT or give up 0.67% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Bekasi Fajar Industrial vs. Puradelta Lestari PT
Performance |
| Timeline |
| Bekasi Fajar Industrial |
| Puradelta Lestari |
Bekasi Fajar and Puradelta Lestari Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Bekasi Fajar and Puradelta Lestari
The main advantage of trading using opposite Bekasi Fajar and Puradelta Lestari positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Bekasi Fajar position performs unexpectedly, Puradelta Lestari 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 Puradelta Lestari will offset losses from the drop in Puradelta Lestari's long position.| Bekasi Fajar vs. Agung Podomoro Land | Bekasi Fajar vs. Surya Semesta Internusa | Bekasi Fajar vs. Alam Sutera Realty | Bekasi Fajar vs. Bumi Serpong Damai |
| Puradelta Lestari vs. Pakuwon Jati Tbk | Puradelta Lestari vs. Sido Muncul PT | Puradelta Lestari vs. Bekasi Fajar Industrial | Puradelta Lestari vs. Bank Pembangunan Timur |
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 Sectors module to list of equity sectors categorizing publicly traded companies based on their primary business activities.
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