Correlation Between Baramulti Suksessarana and Hexindo Adiperkasa
Can any of the company-specific risk be diversified away by investing in both Baramulti Suksessarana and Hexindo Adiperkasa 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 Baramulti Suksessarana and Hexindo Adiperkasa into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Baramulti Suksessarana Tbk and Hexindo Adiperkasa Tbk, you can compare the effects of market volatilities on Baramulti Suksessarana and Hexindo Adiperkasa 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 Baramulti Suksessarana with a short position of Hexindo Adiperkasa. Check out your portfolio center. Please also check ongoing floating volatility patterns of Baramulti Suksessarana and Hexindo Adiperkasa.
Diversification Opportunities for Baramulti Suksessarana and Hexindo Adiperkasa
0.8 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Baramulti and Hexindo is 0.8. Overlapping area represents the amount of risk that can be diversified away by holding Baramulti Suksessarana Tbk and Hexindo Adiperkasa Tbk in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Hexindo Adiperkasa Tbk and Baramulti Suksessarana 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 Baramulti Suksessarana Tbk are associated (or correlated) with Hexindo Adiperkasa. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Hexindo Adiperkasa Tbk has no effect on the direction of Baramulti Suksessarana i.e., Baramulti Suksessarana and Hexindo Adiperkasa go up and down completely randomly.
Pair Corralation between Baramulti Suksessarana and Hexindo Adiperkasa
Assuming the 90 days trading horizon Baramulti Suksessarana Tbk is expected to generate 1.28 times more return on investment than Hexindo Adiperkasa. However, Baramulti Suksessarana is 1.28 times more volatile than Hexindo Adiperkasa Tbk. It trades about 0.06 of its potential returns per unit of risk. Hexindo Adiperkasa Tbk is currently generating about 0.01 per unit of risk. If you would invest 276,671 in Baramulti Suksessarana Tbk on August 30, 2024 and sell it today you would earn a total of 144,329 from holding Baramulti Suksessarana Tbk or generate 52.17% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 99.79% |
| Values | Daily Returns |
Baramulti Suksessarana Tbk vs. Hexindo Adiperkasa Tbk
Performance |
| Timeline |
| Baramulti Suksessarana |
| Hexindo Adiperkasa Tbk |
Baramulti Suksessarana and Hexindo Adiperkasa Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Baramulti Suksessarana and Hexindo Adiperkasa
The main advantage of trading using opposite Baramulti Suksessarana and Hexindo Adiperkasa positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Baramulti Suksessarana position performs unexpectedly, Hexindo Adiperkasa 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 Hexindo Adiperkasa will offset losses from the drop in Hexindo Adiperkasa's long position.| Baramulti Suksessarana vs. Mitrabara Adiperdana PT | Baramulti Suksessarana vs. Bayan Resources Tbk | Baramulti Suksessarana vs. Abm Investama Tbk | Baramulti Suksessarana vs. TBS Energi Utama |
| Hexindo Adiperkasa vs. Bisi International Tbk | Hexindo Adiperkasa vs. Sampoerna Agro Tbk | Hexindo Adiperkasa vs. Akr Corporindo Tbk | Hexindo Adiperkasa vs. Solusi Bangun Indonesia |
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 AI Portfolio Architect module to use AI to generate optimal portfolios and find profitable investment opportunities.
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