Correlation Between Bali Bintang and Hartadinata Abadi
Can any of the company-specific risk be diversified away by investing in both Bali Bintang and Hartadinata Abadi 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 Bali Bintang and Hartadinata Abadi into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Bali Bintang Sejahtera and Hartadinata Abadi Tbk, you can compare the effects of market volatilities on Bali Bintang and Hartadinata Abadi 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 Bali Bintang with a short position of Hartadinata Abadi. Check out your portfolio center. Please also check ongoing floating volatility patterns of Bali Bintang and Hartadinata Abadi.
Diversification Opportunities for Bali Bintang and Hartadinata Abadi
0.4 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Bali and Hartadinata is 0.4. Overlapping area represents the amount of risk that can be diversified away by holding Bali Bintang Sejahtera and Hartadinata Abadi Tbk in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Hartadinata Abadi Tbk and Bali Bintang 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 Bali Bintang Sejahtera are associated (or correlated) with Hartadinata Abadi. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Hartadinata Abadi Tbk has no effect on the direction of Bali Bintang i.e., Bali Bintang and Hartadinata Abadi go up and down completely randomly.
Pair Corralation between Bali Bintang and Hartadinata Abadi
Assuming the 90 days trading horizon Bali Bintang Sejahtera is expected to under-perform the Hartadinata Abadi. But the stock apears to be less risky and, when comparing its historical volatility, Bali Bintang Sejahtera is 3.29 times less risky than Hartadinata Abadi. The stock trades about -0.07 of its potential returns per unit of risk. The Hartadinata Abadi Tbk is currently generating about 0.3 of returns per unit of risk over similar time horizon. If you would invest 32,800 in Hartadinata Abadi Tbk on November 3, 2024 and sell it today you would earn a total of 10,400 from holding Hartadinata Abadi Tbk or generate 31.71% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Bali Bintang Sejahtera vs. Hartadinata Abadi Tbk
Performance |
| Timeline |
| Bali Bintang Sejahtera |
| Hartadinata Abadi Tbk |
Bali Bintang and Hartadinata Abadi Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Bali Bintang and Hartadinata Abadi
The main advantage of trading using opposite Bali Bintang and Hartadinata Abadi positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Bali Bintang position performs unexpectedly, Hartadinata Abadi 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 Hartadinata Abadi will offset losses from the drop in Hartadinata Abadi's long position.| Bali Bintang vs. MD Pictures Tbk | Bali Bintang vs. MNC Studios International | Bali Bintang vs. MNC Vision Networks | Bali Bintang vs. Digital Mediatama Maxima |
| Hartadinata Abadi vs. Steel Pipe Industry | Hartadinata Abadi vs. Puradelta Lestari PT | Hartadinata Abadi vs. Jasa Armada Indonesia | Hartadinata Abadi vs. Integra Indocabinet Tbk |
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 Money Managers module to screen money managers from public funds and ETFs managed around the world.
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