Correlation Between Bekasi Fajar and Lotte Chemical
Can any of the company-specific risk be diversified away by investing in both Bekasi Fajar and Lotte Chemical 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 Lotte Chemical 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 Lotte Chemical Titan, you can compare the effects of market volatilities on Bekasi Fajar and Lotte Chemical 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 Lotte Chemical. Check out your portfolio center. Please also check ongoing floating volatility patterns of Bekasi Fajar and Lotte Chemical.
Diversification Opportunities for Bekasi Fajar and Lotte Chemical
-0.01 | Correlation Coefficient |
Good diversification
The 3 months correlation between Bekasi and Lotte is -0.01. Overlapping area represents the amount of risk that can be diversified away by holding Bekasi Fajar Industrial and Lotte Chemical Titan in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Lotte Chemical Titan 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 Lotte Chemical. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Lotte Chemical Titan has no effect on the direction of Bekasi Fajar i.e., Bekasi Fajar and Lotte Chemical go up and down completely randomly.
Pair Corralation between Bekasi Fajar and Lotte Chemical
Assuming the 90 days trading horizon Bekasi Fajar Industrial is expected to under-perform the Lotte Chemical. In addition to that, Bekasi Fajar is 1.81 times more volatile than Lotte Chemical Titan. It trades about -0.31 of its total potential returns per unit of risk. Lotte Chemical Titan is currently generating about -0.36 per unit of volatility. If you would invest 20,200 in Lotte Chemical Titan on September 4, 2024 and sell it today you would lose (1,700) from holding Lotte Chemical Titan or give up 8.42% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Bekasi Fajar Industrial vs. Lotte Chemical Titan
Performance |
| Timeline |
| Bekasi Fajar Industrial |
| Lotte Chemical Titan |
Bekasi Fajar and Lotte Chemical Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Bekasi Fajar and Lotte Chemical
The main advantage of trading using opposite Bekasi Fajar and Lotte Chemical positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Bekasi Fajar position performs unexpectedly, Lotte Chemical 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 Lotte Chemical will offset losses from the drop in Lotte Chemical's long position.| Bekasi Fajar vs. Mitra Pinasthika Mustika | Bekasi Fajar vs. Jakarta Int Hotels | Bekasi Fajar vs. Asuransi Harta Aman | Bekasi Fajar vs. Indosterling Technomedia Tbk |
| Lotte Chemical vs. Timah Persero Tbk | Lotte Chemical vs. Semen Indonesia Persero | Lotte Chemical vs. Mitra Pinasthika Mustika | Lotte Chemical 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 Aroon Oscillator module to analyze current equity momentum using Aroon Oscillator and other momentum ratios.
Other Complementary Tools
| Investing Opportunities Build portfolios using our predefined set of ideas and optimize them against your investing preferences | |
| Fundamentals Comparison Compare fundamentals across multiple equities to find investing opportunities | |
| Competition Analyzer Analyze and compare many basic indicators for a group of related or unrelated entities | |
| Volatility Analysis Get historical volatility and risk analysis based on latest market data | |
| Sectors List of equity sectors categorizing publicly traded companies based on their primary business activities |