Correlation Between Betonjaya Manunggal and Duta Pertiwi
Can any of the company-specific risk be diversified away by investing in both Betonjaya Manunggal and Duta Pertiwi 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 Duta Pertiwi 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 Duta Pertiwi Nusantara, you can compare the effects of market volatilities on Betonjaya Manunggal and Duta Pertiwi 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 Duta Pertiwi. Check out your portfolio center. Please also check ongoing floating volatility patterns of Betonjaya Manunggal and Duta Pertiwi.
Diversification Opportunities for Betonjaya Manunggal and Duta Pertiwi
0.36 | Correlation Coefficient |
Weak diversification
The 3 months correlation between Betonjaya and Duta is 0.36. Overlapping area represents the amount of risk that can be diversified away by holding Betonjaya Manunggal Tbk and Duta Pertiwi Nusantara in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Duta Pertiwi Nusantara 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 Duta Pertiwi. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Duta Pertiwi Nusantara has no effect on the direction of Betonjaya Manunggal i.e., Betonjaya Manunggal and Duta Pertiwi go up and down completely randomly.
Pair Corralation between Betonjaya Manunggal and Duta Pertiwi
Assuming the 90 days trading horizon Betonjaya Manunggal Tbk is expected to generate 4.34 times more return on investment than Duta Pertiwi. However, Betonjaya Manunggal is 4.34 times more volatile than Duta Pertiwi Nusantara. It trades about -0.01 of its potential returns per unit of risk. Duta Pertiwi Nusantara is currently generating about -0.09 per unit of risk. If you would invest 41,083 in Betonjaya Manunggal Tbk on August 28, 2024 and sell it today you would lose (2,283) from holding Betonjaya Manunggal Tbk or give up 5.56% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Betonjaya Manunggal Tbk vs. Duta Pertiwi Nusantara
Performance |
| Timeline |
| Betonjaya Manunggal Tbk |
| Duta Pertiwi Nusantara |
Betonjaya Manunggal and Duta Pertiwi Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Betonjaya Manunggal and Duta Pertiwi
The main advantage of trading using opposite Betonjaya Manunggal and Duta Pertiwi positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Betonjaya Manunggal position performs unexpectedly, Duta Pertiwi 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 Duta Pertiwi will offset losses from the drop in Duta Pertiwi'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 |
| Duta Pertiwi vs. Intanwijaya Internasional Tbk | Duta Pertiwi vs. Betonjaya Manunggal Tbk | Duta Pertiwi vs. Asiaplast Industries Tbk | Duta Pertiwi vs. Argha Karya Prima |
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 Portfolio Suggestion module to get suggestions outside of your existing asset allocation including your own model portfolios.
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