Correlation Between Bekasi Fajar and City Retail
Can any of the company-specific risk be diversified away by investing in both Bekasi Fajar and City Retail 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 City Retail 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 City Retail Developments, you can compare the effects of market volatilities on Bekasi Fajar and City Retail 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 City Retail. Check out your portfolio center. Please also check ongoing floating volatility patterns of Bekasi Fajar and City Retail.
Diversification Opportunities for Bekasi Fajar and City Retail
0.48 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Bekasi and City is 0.48. Overlapping area represents the amount of risk that can be diversified away by holding Bekasi Fajar Industrial and City Retail Developments in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on City Retail Developments 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 City Retail. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of City Retail Developments has no effect on the direction of Bekasi Fajar i.e., Bekasi Fajar and City Retail go up and down completely randomly.
Pair Corralation between Bekasi Fajar and City Retail
Assuming the 90 days trading horizon Bekasi Fajar Industrial is expected to under-perform the City Retail. In addition to that, Bekasi Fajar is 4.25 times more volatile than City Retail Developments. It trades about -0.05 of its total potential returns per unit of risk. City Retail Developments is currently generating about -0.06 per unit of volatility. If you would invest 14,000 in City Retail Developments on November 3, 2024 and sell it today you would lose (900.00) from holding City Retail Developments or give up 6.43% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 99.57% |
| Values | Daily Returns |
Bekasi Fajar Industrial vs. City Retail Developments
Performance |
| Timeline |
| Bekasi Fajar Industrial |
| City Retail Developments |
Bekasi Fajar and City Retail Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Bekasi Fajar and City Retail
The main advantage of trading using opposite Bekasi Fajar and City Retail positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Bekasi Fajar position performs unexpectedly, City Retail 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 City Retail will offset losses from the drop in City Retail's long position.| Bekasi Fajar vs. Alam Sutera Realty | Bekasi Fajar vs. Bumi Serpong Damai | Bekasi Fajar vs. Sentul City Tbk |
| City Retail vs. Metropolitan Land Tbk | City Retail vs. Bekasi Fajar Industrial | City Retail vs. Greenwood Sejahtera Tbk | City Retail vs. Metropolitan Kentjana 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 Portfolio Holdings module to check your current holdings and cash postion to detemine if your portfolio needs rebalancing.
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