Correlation Between Indo Kordsa and Betonjaya Manunggal
Can any of the company-specific risk be diversified away by investing in both Indo Kordsa and Betonjaya Manunggal 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 Indo Kordsa and Betonjaya Manunggal into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Indo Kordsa Tbk and Betonjaya Manunggal Tbk, you can compare the effects of market volatilities on Indo Kordsa and Betonjaya Manunggal 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 Indo Kordsa with a short position of Betonjaya Manunggal. Check out your portfolio center. Please also check ongoing floating volatility patterns of Indo Kordsa and Betonjaya Manunggal.
Diversification Opportunities for Indo Kordsa and Betonjaya Manunggal
-0.51 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Indo and Betonjaya is -0.51. Overlapping area represents the amount of risk that can be diversified away by holding Indo Kordsa Tbk and Betonjaya Manunggal Tbk in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Betonjaya Manunggal Tbk and Indo Kordsa 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 Indo Kordsa Tbk are associated (or correlated) with Betonjaya Manunggal. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Betonjaya Manunggal Tbk has no effect on the direction of Indo Kordsa i.e., Indo Kordsa and Betonjaya Manunggal go up and down completely randomly.
Pair Corralation between Indo Kordsa and Betonjaya Manunggal
Assuming the 90 days trading horizon Indo Kordsa is expected to generate 28.74 times less return on investment than Betonjaya Manunggal. But when comparing it to its historical volatility, Indo Kordsa Tbk is 1.85 times less risky than Betonjaya Manunggal. It trades about 0.01 of its potential returns per unit of risk. Betonjaya Manunggal Tbk is currently generating about 0.12 of returns per unit of risk over similar time horizon. If you would invest 36,400 in Betonjaya Manunggal Tbk on September 4, 2024 and sell it today you would earn a total of 4,600 from holding Betonjaya Manunggal Tbk or generate 12.64% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Indo Kordsa Tbk vs. Betonjaya Manunggal Tbk
Performance |
| Timeline |
| Indo Kordsa Tbk |
| Betonjaya Manunggal Tbk |
Indo Kordsa and Betonjaya Manunggal Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Indo Kordsa and Betonjaya Manunggal
The main advantage of trading using opposite Indo Kordsa and Betonjaya Manunggal positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Indo Kordsa position performs unexpectedly, Betonjaya Manunggal 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 Betonjaya Manunggal will offset losses from the drop in Betonjaya Manunggal's long position.| Indo Kordsa vs. Goodyear Indonesia Tbk | Indo Kordsa vs. Sepatu Bata Tbk | Indo Kordsa vs. Indospring Tbk | Indo Kordsa vs. Ever Shine Textile |
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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 Flow Index module to determine momentum by analyzing Money Flow Index and other technical indicators.
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