Correlation Between Buana Listya and Rukun Raharja
Can any of the company-specific risk be diversified away by investing in both Buana Listya and Rukun Raharja 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 Buana Listya and Rukun Raharja into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Buana Listya Tama and Rukun Raharja Tbk, you can compare the effects of market volatilities on Buana Listya and Rukun Raharja 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 Buana Listya with a short position of Rukun Raharja. Check out your portfolio center. Please also check ongoing floating volatility patterns of Buana Listya and Rukun Raharja.
Diversification Opportunities for Buana Listya and Rukun Raharja
0.15 | Correlation Coefficient |
Average diversification
The 3 months correlation between Buana and Rukun is 0.15. Overlapping area represents the amount of risk that can be diversified away by holding Buana Listya Tama and Rukun Raharja Tbk in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Rukun Raharja Tbk and Buana Listya 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 Buana Listya Tama are associated (or correlated) with Rukun Raharja. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Rukun Raharja Tbk has no effect on the direction of Buana Listya i.e., Buana Listya and Rukun Raharja go up and down completely randomly.
Pair Corralation between Buana Listya and Rukun Raharja
Assuming the 90 days trading horizon Buana Listya Tama is expected to under-perform the Rukun Raharja. But the stock apears to be less risky and, when comparing its historical volatility, Buana Listya Tama is 1.51 times less risky than Rukun Raharja. The stock trades about -0.05 of its potential returns per unit of risk. The Rukun Raharja Tbk is currently generating about 0.26 of returns per unit of risk over similar time horizon. If you would invest 128,500 in Rukun Raharja Tbk on August 25, 2024 and sell it today you would earn a total of 107,500 from holding Rukun Raharja Tbk or generate 83.66% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Buana Listya Tama vs. Rukun Raharja Tbk
Performance |
| Timeline |
| Buana Listya Tama |
| Rukun Raharja Tbk |
Buana Listya and Rukun Raharja Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Buana Listya and Rukun Raharja
The main advantage of trading using opposite Buana Listya and Rukun Raharja positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Buana Listya position performs unexpectedly, Rukun Raharja 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 Rukun Raharja will offset losses from the drop in Rukun Raharja's long position.| Buana Listya vs. Rukun Raharja Tbk | Buana Listya vs. PT Temas Tbk | Buana Listya vs. Weha Transportasi Indonesia |
| Rukun Raharja vs. Petrosea Tbk | Rukun Raharja vs. Harum Energy Tbk | Rukun Raharja vs. Perdana Karya Perkasa | Rukun Raharja vs. Samindo Resources 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 Aroon Oscillator module to analyze current equity momentum using Aroon Oscillator and other momentum ratios.
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