Correlation Between Bekasi Fajar and Soechi Lines
Can any of the company-specific risk be diversified away by investing in both Bekasi Fajar and Soechi Lines 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 Soechi Lines 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 Soechi Lines Tbk, you can compare the effects of market volatilities on Bekasi Fajar and Soechi Lines 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 Soechi Lines. Check out your portfolio center. Please also check ongoing floating volatility patterns of Bekasi Fajar and Soechi Lines.
Diversification Opportunities for Bekasi Fajar and Soechi Lines
0.52 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Bekasi and Soechi is 0.52. Overlapping area represents the amount of risk that can be diversified away by holding Bekasi Fajar Industrial and Soechi Lines Tbk in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Soechi Lines Tbk 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 Soechi Lines. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Soechi Lines Tbk has no effect on the direction of Bekasi Fajar i.e., Bekasi Fajar and Soechi Lines go up and down completely randomly.
Pair Corralation between Bekasi Fajar and Soechi Lines
Assuming the 90 days trading horizon Bekasi Fajar Industrial is expected to under-perform the Soechi Lines. But the stock apears to be less risky and, when comparing its historical volatility, Bekasi Fajar Industrial is 1.01 times less risky than Soechi Lines. The stock trades about -0.03 of its potential returns per unit of risk. The Soechi Lines Tbk is currently generating about 0.0 of returns per unit of risk over similar time horizon. If you would invest 18,400 in Soechi Lines Tbk on September 4, 2024 and sell it today you would lose (1,300) from holding Soechi Lines Tbk or give up 7.07% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Bekasi Fajar Industrial vs. Soechi Lines Tbk
Performance |
| Timeline |
| Bekasi Fajar Industrial |
| Soechi Lines Tbk |
Bekasi Fajar and Soechi Lines Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Bekasi Fajar and Soechi Lines
The main advantage of trading using opposite Bekasi Fajar and Soechi Lines positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Bekasi Fajar position performs unexpectedly, Soechi Lines 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 Soechi Lines will offset losses from the drop in Soechi Lines' 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 |
| Soechi Lines vs. Weha Transportasi Indonesia | Soechi Lines vs. Mitra Pinasthika Mustika | Soechi Lines vs. Jakarta Int Hotels | Soechi Lines vs. Asuransi Harta Aman |
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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