Correlation Between Betonjaya Manunggal and Argha Karya
Can any of the company-specific risk be diversified away by investing in both Betonjaya Manunggal and Argha Karya 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 Betonjaya Manunggal and Argha Karya into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Betonjaya Manunggal Tbk and Argha Karya Prima, you can compare the effects of market volatilities on Betonjaya Manunggal and Argha Karya 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 Betonjaya Manunggal with a short position of Argha Karya. Check out your portfolio center. Please also check ongoing floating volatility patterns of Betonjaya Manunggal and Argha Karya.
Diversification Opportunities for Betonjaya Manunggal and Argha Karya
0.23 | Correlation Coefficient |
Modest diversification
The 3 months correlation between Betonjaya and Argha is 0.23. Overlapping area represents the amount of risk that can be diversified away by holding Betonjaya Manunggal Tbk and Argha Karya Prima in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Argha Karya Prima and Betonjaya Manunggal 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 Betonjaya Manunggal Tbk are associated (or correlated) with Argha Karya. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Argha Karya Prima has no effect on the direction of Betonjaya Manunggal i.e., Betonjaya Manunggal and Argha Karya go up and down completely randomly.
Pair Corralation between Betonjaya Manunggal and Argha Karya
Assuming the 90 days trading horizon Betonjaya Manunggal Tbk is expected to generate 3.68 times more return on investment than Argha Karya. However, Betonjaya Manunggal is 3.68 times more volatile than Argha Karya Prima. It trades about 0.03 of its potential returns per unit of risk. Argha Karya Prima is currently generating about -0.25 per unit of risk. If you would invest 38,800 in Betonjaya Manunggal Tbk on August 28, 2024 and sell it today you would earn a total of 0.00 from holding Betonjaya Manunggal Tbk or generate 0.0% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Betonjaya Manunggal Tbk vs. Argha Karya Prima
Performance |
| Timeline |
| Betonjaya Manunggal Tbk |
| Argha Karya Prima |
Betonjaya Manunggal and Argha Karya Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Betonjaya Manunggal and Argha Karya
The main advantage of trading using opposite Betonjaya Manunggal and Argha Karya positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Betonjaya Manunggal position performs unexpectedly, Argha Karya 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 Argha Karya will offset losses from the drop in Argha Karya's long position.| Betonjaya Manunggal vs. Gunawan Dianjaya Steel | Betonjaya Manunggal vs. Steel Pipe Industry | Betonjaya Manunggal vs. Ifishdeco PT | Betonjaya Manunggal vs. Saraswanti Anugerah Makmur |
| Argha Karya vs. Kedaung Indah Can | Argha Karya vs. Langgeng Makmur Industri | Argha Karya vs. Kabelindo Murni Tbk | Argha Karya vs. Mustika Ratu 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 Funds Screener module to find actively-traded funds from around the world traded on over 30 global exchanges.
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