Correlation Between Hartadinata Abadi and Armada Berjaya
Can any of the company-specific risk be diversified away by investing in both Hartadinata Abadi and Armada Berjaya 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 Hartadinata Abadi and Armada Berjaya into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Hartadinata Abadi Tbk and Armada Berjaya Trans, you can compare the effects of market volatilities on Hartadinata Abadi and Armada Berjaya 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 Hartadinata Abadi with a short position of Armada Berjaya. Check out your portfolio center. Please also check ongoing floating volatility patterns of Hartadinata Abadi and Armada Berjaya.
Diversification Opportunities for Hartadinata Abadi and Armada Berjaya
0.78 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Hartadinata and Armada is 0.78. Overlapping area represents the amount of risk that can be diversified away by holding Hartadinata Abadi Tbk and Armada Berjaya Trans in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Armada Berjaya Trans and Hartadinata Abadi 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 Hartadinata Abadi Tbk are associated (or correlated) with Armada Berjaya. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Armada Berjaya Trans has no effect on the direction of Hartadinata Abadi i.e., Hartadinata Abadi and Armada Berjaya go up and down completely randomly.
Pair Corralation between Hartadinata Abadi and Armada Berjaya
Assuming the 90 days trading horizon Hartadinata Abadi Tbk is expected to generate 0.98 times more return on investment than Armada Berjaya. However, Hartadinata Abadi Tbk is 1.03 times less risky than Armada Berjaya. It trades about 0.05 of its potential returns per unit of risk. Armada Berjaya Trans is currently generating about -0.01 per unit of risk. If you would invest 35,055 in Hartadinata Abadi Tbk on November 4, 2024 and sell it today you would earn a total of 8,145 from holding Hartadinata Abadi Tbk or generate 23.23% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Hartadinata Abadi Tbk vs. Armada Berjaya Trans
Performance |
| Timeline |
| Hartadinata Abadi Tbk |
| Armada Berjaya Trans |
Hartadinata Abadi and Armada Berjaya Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Hartadinata Abadi and Armada Berjaya
The main advantage of trading using opposite Hartadinata Abadi and Armada Berjaya positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Hartadinata Abadi position performs unexpectedly, Armada Berjaya 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 Armada Berjaya will offset losses from the drop in Armada Berjaya's long position.| Hartadinata Abadi vs. Steel Pipe Industry | Hartadinata Abadi vs. Puradelta Lestari PT | Hartadinata Abadi vs. Jasa Armada Indonesia | Hartadinata Abadi vs. Integra Indocabinet Tbk |
| Armada Berjaya vs. Guna Timur Raya | Armada Berjaya vs. Sinergi Inti Plastindo | Armada Berjaya vs. Hartadinata Abadi Tbk | Armada Berjaya vs. Weha Transportasi Indonesia |
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 Dashboard module to portfolio dashboard that provides centralized access to all your investments.
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