Correlation Between Bhuwanatala Indah and Pabrik Kertas
Can any of the company-specific risk be diversified away by investing in both Bhuwanatala Indah and Pabrik Kertas 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 Pabrik Kertas 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 Pabrik Kertas Tjiwi, you can compare the effects of market volatilities on Bhuwanatala Indah and Pabrik Kertas 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 Pabrik Kertas. Check out your portfolio center. Please also check ongoing floating volatility patterns of Bhuwanatala Indah and Pabrik Kertas.
Diversification Opportunities for Bhuwanatala Indah and Pabrik Kertas
-0.61 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Bhuwanatala and Pabrik is -0.61. Overlapping area represents the amount of risk that can be diversified away by holding Bhuwanatala Indah Permai and Pabrik Kertas Tjiwi in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Pabrik Kertas Tjiwi 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 Pabrik Kertas. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Pabrik Kertas Tjiwi has no effect on the direction of Bhuwanatala Indah i.e., Bhuwanatala Indah and Pabrik Kertas go up and down completely randomly.
Pair Corralation between Bhuwanatala Indah and Pabrik Kertas
Assuming the 90 days trading horizon Bhuwanatala Indah Permai is expected to under-perform the Pabrik Kertas. In addition to that, Bhuwanatala Indah is 1.29 times more volatile than Pabrik Kertas Tjiwi. It trades about -0.03 of its total potential returns per unit of risk. Pabrik Kertas Tjiwi is currently generating about 0.0 per unit of volatility. If you would invest 737,855 in Pabrik Kertas Tjiwi on September 12, 2024 and sell it today you would lose (82,855) from holding Pabrik Kertas Tjiwi or give up 11.23% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Bhuwanatala Indah Permai vs. Pabrik Kertas Tjiwi
Performance |
| Timeline |
| Bhuwanatala Indah Permai |
| Pabrik Kertas Tjiwi |
Bhuwanatala Indah and Pabrik Kertas Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Bhuwanatala Indah and Pabrik Kertas
The main advantage of trading using opposite Bhuwanatala Indah and Pabrik Kertas positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Bhuwanatala Indah position performs unexpectedly, Pabrik Kertas 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 Pabrik Kertas will offset losses from the drop in Pabrik Kertas' 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 |
| Pabrik Kertas vs. Kedaung Indah Can | Pabrik Kertas vs. Kabelindo Murni Tbk | Pabrik Kertas vs. Champion Pacific Indonesia | Pabrik Kertas 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 Content Syndication module to quickly integrate customizable finance content to your own investment portal.
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