Correlation Between Bhakti Multi and Nusantara Almazia
Can any of the company-specific risk be diversified away by investing in both Bhakti Multi and Nusantara Almazia 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 Bhakti Multi and Nusantara Almazia into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Bhakti Multi Artha and Nusantara Almazia, you can compare the effects of market volatilities on Bhakti Multi and Nusantara Almazia 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 Bhakti Multi with a short position of Nusantara Almazia. Check out your portfolio center. Please also check ongoing floating volatility patterns of Bhakti Multi and Nusantara Almazia.
Diversification Opportunities for Bhakti Multi and Nusantara Almazia
0.28 | Correlation Coefficient |
Modest diversification
The 3 months correlation between Bhakti and Nusantara is 0.28. Overlapping area represents the amount of risk that can be diversified away by holding Bhakti Multi Artha and Nusantara Almazia in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Nusantara Almazia and Bhakti Multi 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 Bhakti Multi Artha are associated (or correlated) with Nusantara Almazia. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Nusantara Almazia has no effect on the direction of Bhakti Multi i.e., Bhakti Multi and Nusantara Almazia go up and down completely randomly.
Pair Corralation between Bhakti Multi and Nusantara Almazia
Assuming the 90 days trading horizon Bhakti Multi Artha is expected to under-perform the Nusantara Almazia. But the stock apears to be less risky and, when comparing its historical volatility, Bhakti Multi Artha is 4.04 times less risky than Nusantara Almazia. The stock trades about -0.35 of its potential returns per unit of risk. The Nusantara Almazia is currently generating about -0.05 of returns per unit of risk over similar time horizon. If you would invest 8,200 in Nusantara Almazia on August 30, 2024 and sell it today you would lose (1,100) from holding Nusantara Almazia or give up 13.41% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Bhakti Multi Artha vs. Nusantara Almazia
Performance |
| Timeline |
| Bhakti Multi Artha |
| Nusantara Almazia |
Bhakti Multi and Nusantara Almazia Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Bhakti Multi and Nusantara Almazia
The main advantage of trading using opposite Bhakti Multi and Nusantara Almazia positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Bhakti Multi position performs unexpectedly, Nusantara Almazia 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 Nusantara Almazia will offset losses from the drop in Nusantara Almazia's long position.| Bhakti Multi vs. Metro Healthcare Indonesia | Bhakti Multi vs. Bintang Oto Global | Bhakti Multi vs. Surya Permata Andalan | Bhakti Multi vs. Capital Financial Indonesia |
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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 Pair Correlation module to compare performance and examine fundamental relationship between any two equity instruments.
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