Correlation Between Bekasi Fajar and Indomobil Sukses
Can any of the company-specific risk be diversified away by investing in both Bekasi Fajar and Indomobil Sukses 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 Indomobil Sukses 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 Indomobil Sukses Internasional, you can compare the effects of market volatilities on Bekasi Fajar and Indomobil Sukses 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 Indomobil Sukses. Check out your portfolio center. Please also check ongoing floating volatility patterns of Bekasi Fajar and Indomobil Sukses.
Diversification Opportunities for Bekasi Fajar and Indomobil Sukses
0.94 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between Bekasi and Indomobil is 0.94. Overlapping area represents the amount of risk that can be diversified away by holding Bekasi Fajar Industrial and Indomobil Sukses Internasional in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Indomobil Sukses Int 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 Indomobil Sukses. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Indomobil Sukses Int has no effect on the direction of Bekasi Fajar i.e., Bekasi Fajar and Indomobil Sukses go up and down completely randomly.
Pair Corralation between Bekasi Fajar and Indomobil Sukses
Assuming the 90 days trading horizon Bekasi Fajar Industrial is expected to generate 1.05 times more return on investment than Indomobil Sukses. However, Bekasi Fajar is 1.05 times more volatile than Indomobil Sukses Internasional. It trades about -0.09 of its potential returns per unit of risk. Indomobil Sukses Internasional is currently generating about -0.16 per unit of risk. If you would invest 10,000 in Bekasi Fajar Industrial on October 24, 2024 and sell it today you would lose (300.00) from holding Bekasi Fajar Industrial or give up 3.0% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 94.74% |
| Values | Daily Returns |
Bekasi Fajar Industrial vs. Indomobil Sukses Internasional
Performance |
| Timeline |
| Bekasi Fajar Industrial |
| Indomobil Sukses Int |
Bekasi Fajar and Indomobil Sukses Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Bekasi Fajar and Indomobil Sukses
The main advantage of trading using opposite Bekasi Fajar and Indomobil Sukses positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Bekasi Fajar position performs unexpectedly, Indomobil Sukses 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 Indomobil Sukses will offset losses from the drop in Indomobil Sukses' 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 |
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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 Bonds Directory module to find actively traded corporate debentures issued by US companies.
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