Correlation Between PT Berkah and China National
Can any of the company-specific risk be diversified away by investing in both PT Berkah and China National 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 PT Berkah and China National into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between PT Berkah Beton and China National Building, you can compare the effects of market volatilities on PT Berkah and China National 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 PT Berkah with a short position of China National. Check out your portfolio center. Please also check ongoing floating volatility patterns of PT Berkah and China National.
Diversification Opportunities for PT Berkah and China National
0.0 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between BHBSY and China is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding PT Berkah Beton and China National Building in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on China National Building and PT Berkah 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 PT Berkah Beton are associated (or correlated) with China National. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of China National Building has no effect on the direction of PT Berkah i.e., PT Berkah and China National go up and down completely randomly.
Pair Corralation between PT Berkah and China National
If you would invest 2,239 in China National Building on August 27, 2024 and sell it today you would lose (68.00) from holding China National Building or give up 3.04% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Flat |
| Strength | Insignificant |
| Accuracy | 87.9% |
| Values | Daily Returns |
PT Berkah Beton vs. China National Building
Performance |
| Timeline |
| PT Berkah Beton |
| China National Building |
PT Berkah and China National Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with PT Berkah and China National
The main advantage of trading using opposite PT Berkah and China National positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if PT Berkah position performs unexpectedly, China National 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 China National will offset losses from the drop in China National's long position.The idea behind PT Berkah Beton and China National Building pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.| China National vs. Anhui Conch Cement | China National vs. Buzzi Unicem SpA | China National vs. Wienerberger Baustoffindustrie | China National vs. Lafargeholcim Ltd ADR |
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 Latest Portfolios module to quick portfolio dashboard that showcases your latest portfolios.
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