Correlation Between PT Berkah and Eagle Materials
Can any of the company-specific risk be diversified away by investing in both PT Berkah and Eagle Materials 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 Eagle Materials 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 Eagle Materials, you can compare the effects of market volatilities on PT Berkah and Eagle Materials 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 Eagle Materials. Check out your portfolio center. Please also check ongoing floating volatility patterns of PT Berkah and Eagle Materials.
Diversification Opportunities for PT Berkah and Eagle Materials
0.0 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between BHBSY and Eagle is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding PT Berkah Beton and Eagle Materials in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Eagle Materials 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 Eagle Materials. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Eagle Materials has no effect on the direction of PT Berkah i.e., PT Berkah and Eagle Materials go up and down completely randomly.
Pair Corralation between PT Berkah and Eagle Materials
If you would invest 24,828 in Eagle Materials on October 26, 2024 and sell it today you would earn a total of 1,388 from holding Eagle Materials or generate 5.59% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Flat |
| Strength | Insignificant |
| Accuracy | 99.19% |
| Values | Daily Returns |
PT Berkah Beton vs. Eagle Materials
Performance |
| Timeline |
| PT Berkah Beton |
| Eagle Materials |
PT Berkah and Eagle Materials Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with PT Berkah and Eagle Materials
The main advantage of trading using opposite PT Berkah and Eagle Materials positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if PT Berkah position performs unexpectedly, Eagle Materials 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 Eagle Materials will offset losses from the drop in Eagle Materials' long position.The idea behind PT Berkah Beton and Eagle Materials 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.| Eagle Materials vs. Vulcan Materials | Eagle Materials vs. CRH PLC ADR | Eagle Materials vs. Summit Materials | Eagle Materials vs. Cemex SAB de |
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 Theme Ratings module to determine theme ratings based on digital equity recommendations. Macroaxis theme ratings are based on combination of fundamental analysis and risk-adjusted market performance.
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