Correlation Between Bhuwanatala Indah and Steel Pipe
Can any of the company-specific risk be diversified away by investing in both Bhuwanatala Indah and Steel Pipe 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 Bhuwanatala Indah and Steel Pipe into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Bhuwanatala Indah Permai and Steel Pipe Industry, you can compare the effects of market volatilities on Bhuwanatala Indah and Steel Pipe 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 Bhuwanatala Indah with a short position of Steel Pipe. Check out your portfolio center. Please also check ongoing floating volatility patterns of Bhuwanatala Indah and Steel Pipe.
Diversification Opportunities for Bhuwanatala Indah and Steel Pipe
-0.61 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Bhuwanatala and Steel is -0.61. Overlapping area represents the amount of risk that can be diversified away by holding Bhuwanatala Indah Permai and Steel Pipe Industry in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Steel Pipe Industry and Bhuwanatala Indah 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 Bhuwanatala Indah Permai are associated (or correlated) with Steel Pipe. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Steel Pipe Industry has no effect on the direction of Bhuwanatala Indah i.e., Bhuwanatala Indah and Steel Pipe go up and down completely randomly.
Pair Corralation between Bhuwanatala Indah and Steel Pipe
Assuming the 90 days trading horizon Bhuwanatala Indah Permai is expected to generate 3.0 times more return on investment than Steel Pipe. However, Bhuwanatala Indah is 3.0 times more volatile than Steel Pipe Industry. It trades about 0.1 of its potential returns per unit of risk. Steel Pipe Industry is currently generating about -0.06 per unit of risk. If you would invest 2,700 in Bhuwanatala Indah Permai on September 12, 2024 and sell it today you would earn a total of 500.00 from holding Bhuwanatala Indah Permai or generate 18.52% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Bhuwanatala Indah Permai vs. Steel Pipe Industry
Performance |
| Timeline |
| Bhuwanatala Indah Permai |
| Steel Pipe Industry |
Bhuwanatala Indah and Steel Pipe Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Bhuwanatala Indah and Steel Pipe
The main advantage of trading using opposite Bhuwanatala Indah and Steel Pipe positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Bhuwanatala Indah position performs unexpectedly, Steel Pipe 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 Steel Pipe will offset losses from the drop in Steel Pipe's long position.| Bhuwanatala Indah vs. Ciputra Development Tbk | Bhuwanatala Indah vs. Bumi Serpong Damai | Bhuwanatala Indah vs. Alam Sutera Realty | Bhuwanatala Indah vs. Lippo Karawaci Tbk |
| Steel Pipe vs. Kedaung Indah Can | Steel Pipe vs. Kabelindo Murni Tbk | Steel Pipe vs. Champion Pacific Indonesia | Steel Pipe vs. Bhuwanatala Indah Permai |
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 Equity Search module to search for actively traded equities including funds and ETFs from over 30 global markets.
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