Correlation Between Batavia Prosperindo and Equity Development
Can any of the company-specific risk be diversified away by investing in both Batavia Prosperindo and Equity Development 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 Batavia Prosperindo and Equity Development into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Batavia Prosperindo Finance and Equity Development Investment, you can compare the effects of market volatilities on Batavia Prosperindo and Equity Development 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 Batavia Prosperindo with a short position of Equity Development. Check out your portfolio center. Please also check ongoing floating volatility patterns of Batavia Prosperindo and Equity Development.
Diversification Opportunities for Batavia Prosperindo and Equity Development
-0.23 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Batavia and Equity is -0.23. Overlapping area represents the amount of risk that can be diversified away by holding Batavia Prosperindo Finance and Equity Development Investment in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Equity Development and Batavia Prosperindo 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 Batavia Prosperindo Finance are associated (or correlated) with Equity Development. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Equity Development has no effect on the direction of Batavia Prosperindo i.e., Batavia Prosperindo and Equity Development go up and down completely randomly.
Pair Corralation between Batavia Prosperindo and Equity Development
Assuming the 90 days trading horizon Batavia Prosperindo Finance is expected to generate 0.49 times more return on investment than Equity Development. However, Batavia Prosperindo Finance is 2.04 times less risky than Equity Development. It trades about -0.12 of its potential returns per unit of risk. Equity Development Investment is currently generating about -0.24 per unit of risk. If you would invest 31,600 in Batavia Prosperindo Finance on August 31, 2024 and sell it today you would lose (1,000.00) from holding Batavia Prosperindo Finance or give up 3.16% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Batavia Prosperindo Finance vs. Equity Development Investment
Performance |
| Timeline |
| Batavia Prosperindo |
| Equity Development |
Batavia Prosperindo and Equity Development Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Batavia Prosperindo and Equity Development
The main advantage of trading using opposite Batavia Prosperindo and Equity Development positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Batavia Prosperindo position performs unexpectedly, Equity Development 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 Equity Development will offset losses from the drop in Equity Development's long position.| Batavia Prosperindo vs. Buana Finance Tbk | Batavia Prosperindo vs. Clipan Finance Indonesia | Batavia Prosperindo vs. Asuransi Bintang Tbk | Batavia Prosperindo vs. Bank Bumi Arta |
| Equity Development vs. Bank BRISyariah Tbk | Equity Development vs. Ace Hardware Indonesia | Equity Development vs. Merdeka Copper Gold | Equity Development vs. Mitra Pinasthika Mustika |
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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