Correlation Between Betonjaya Manunggal and Asiaplast Industries
Can any of the company-specific risk be diversified away by investing in both Betonjaya Manunggal and Asiaplast Industries 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 Asiaplast Industries 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 Asiaplast Industries Tbk, you can compare the effects of market volatilities on Betonjaya Manunggal and Asiaplast Industries 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 Asiaplast Industries. Check out your portfolio center. Please also check ongoing floating volatility patterns of Betonjaya Manunggal and Asiaplast Industries.
Diversification Opportunities for Betonjaya Manunggal and Asiaplast Industries
0.49 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Betonjaya and Asiaplast is 0.49. Overlapping area represents the amount of risk that can be diversified away by holding Betonjaya Manunggal Tbk and Asiaplast Industries Tbk in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Asiaplast Industries Tbk 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 Asiaplast Industries. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Asiaplast Industries Tbk has no effect on the direction of Betonjaya Manunggal i.e., Betonjaya Manunggal and Asiaplast Industries go up and down completely randomly.
Pair Corralation between Betonjaya Manunggal and Asiaplast Industries
Assuming the 90 days trading horizon Betonjaya Manunggal Tbk is expected to generate 1.93 times more return on investment than Asiaplast Industries. However, Betonjaya Manunggal is 1.93 times more volatile than Asiaplast Industries Tbk. It trades about 0.03 of its potential returns per unit of risk. Asiaplast Industries Tbk is currently generating about -0.05 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 | Weak |
| Accuracy | 95.45% |
| Values | Daily Returns |
Betonjaya Manunggal Tbk vs. Asiaplast Industries Tbk
Performance |
| Timeline |
| Betonjaya Manunggal Tbk |
| Asiaplast Industries Tbk |
Betonjaya Manunggal and Asiaplast Industries Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Betonjaya Manunggal and Asiaplast Industries
The main advantage of trading using opposite Betonjaya Manunggal and Asiaplast Industries positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Betonjaya Manunggal position performs unexpectedly, Asiaplast Industries 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 Asiaplast Industries will offset losses from the drop in Asiaplast Industries' 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 |
| Asiaplast Industries vs. Kedaung Indah Can | Asiaplast Industries vs. Langgeng Makmur Industri | Asiaplast Industries vs. Kabelindo Murni Tbk | Asiaplast Industries 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 Economic Indicators module to top statistical indicators that provide insights into how an economy is performing.
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