Correlation Between Hexindo Adiperkasa and Baramulti Suksessarana
Can any of the company-specific risk be diversified away by investing in both Hexindo Adiperkasa and Baramulti Suksessarana 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 Hexindo Adiperkasa and Baramulti Suksessarana into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Hexindo Adiperkasa Tbk and Baramulti Suksessarana Tbk, you can compare the effects of market volatilities on Hexindo Adiperkasa and Baramulti Suksessarana 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 Hexindo Adiperkasa with a short position of Baramulti Suksessarana. Check out your portfolio center. Please also check ongoing floating volatility patterns of Hexindo Adiperkasa and Baramulti Suksessarana.
Diversification Opportunities for Hexindo Adiperkasa and Baramulti Suksessarana
0.73 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Hexindo and Baramulti is 0.73. Overlapping area represents the amount of risk that can be diversified away by holding Hexindo Adiperkasa Tbk and Baramulti Suksessarana Tbk in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Baramulti Suksessarana and Hexindo Adiperkasa 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 Hexindo Adiperkasa Tbk are associated (or correlated) with Baramulti Suksessarana. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Baramulti Suksessarana has no effect on the direction of Hexindo Adiperkasa i.e., Hexindo Adiperkasa and Baramulti Suksessarana go up and down completely randomly.
Pair Corralation between Hexindo Adiperkasa and Baramulti Suksessarana
Assuming the 90 days trading horizon Hexindo Adiperkasa Tbk is expected to under-perform the Baramulti Suksessarana. But the stock apears to be less risky and, when comparing its historical volatility, Hexindo Adiperkasa Tbk is 1.41 times less risky than Baramulti Suksessarana. The stock trades about -0.61 of its potential returns per unit of risk. The Baramulti Suksessarana Tbk is currently generating about 0.02 of returns per unit of risk over similar time horizon. If you would invest 427,891 in Baramulti Suksessarana Tbk on August 26, 2024 and sell it today you would earn a total of 1,109 from holding Baramulti Suksessarana Tbk or generate 0.26% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Hexindo Adiperkasa Tbk vs. Baramulti Suksessarana Tbk
Performance |
| Timeline |
| Hexindo Adiperkasa Tbk |
| Baramulti Suksessarana |
Hexindo Adiperkasa and Baramulti Suksessarana Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Hexindo Adiperkasa and Baramulti Suksessarana
The main advantage of trading using opposite Hexindo Adiperkasa and Baramulti Suksessarana positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Hexindo Adiperkasa position performs unexpectedly, Baramulti Suksessarana 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 Baramulti Suksessarana will offset losses from the drop in Baramulti Suksessarana's long position.| Hexindo Adiperkasa vs. Rukun Raharja Tbk | Hexindo Adiperkasa vs. PT Temas Tbk | Hexindo Adiperkasa vs. Weha Transportasi Indonesia |
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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 My Watchlist Analysis module to analyze my current watchlist and to refresh optimization strategy. Macroaxis watchlist is based on self-learning algorithm to remember stocks you like.
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