Correlation Between Hartadinata Abadi and Unggul Indah
Can any of the company-specific risk be diversified away by investing in both Hartadinata Abadi and Unggul Indah 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 Unggul Indah 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 Unggul Indah Cahaya, you can compare the effects of market volatilities on Hartadinata Abadi and Unggul Indah 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 Unggul Indah. Check out your portfolio center. Please also check ongoing floating volatility patterns of Hartadinata Abadi and Unggul Indah.
Diversification Opportunities for Hartadinata Abadi and Unggul Indah
-0.54 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Hartadinata and Unggul is -0.54. Overlapping area represents the amount of risk that can be diversified away by holding Hartadinata Abadi Tbk and Unggul Indah Cahaya in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Unggul Indah Cahaya 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 Unggul Indah. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Unggul Indah Cahaya has no effect on the direction of Hartadinata Abadi i.e., Hartadinata Abadi and Unggul Indah go up and down completely randomly.
Pair Corralation between Hartadinata Abadi and Unggul Indah
Assuming the 90 days trading horizon Hartadinata Abadi Tbk is expected to generate 2.52 times more return on investment than Unggul Indah. However, Hartadinata Abadi is 2.52 times more volatile than Unggul Indah Cahaya. It trades about 0.05 of its potential returns per unit of risk. Unggul Indah Cahaya is currently generating about -0.02 per unit of risk. If you would invest 31,460 in Hartadinata Abadi Tbk on November 19, 2024 and sell it today you would earn a total of 17,540 from holding Hartadinata Abadi Tbk or generate 55.75% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 99.79% |
| Values | Daily Returns |
Hartadinata Abadi Tbk vs. Unggul Indah Cahaya
Performance |
| Timeline |
| Hartadinata Abadi Tbk |
| Unggul Indah Cahaya |
Hartadinata Abadi and Unggul Indah Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Hartadinata Abadi and Unggul Indah
The main advantage of trading using opposite Hartadinata Abadi and Unggul Indah positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Hartadinata Abadi position performs unexpectedly, Unggul Indah 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 Unggul Indah will offset losses from the drop in Unggul Indah'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 |
| Unggul Indah vs. Trias Sentosa Tbk | Unggul Indah vs. Suparma Tbk | Unggul Indah vs. Tembaga Mulia Semanan | Unggul Indah vs. Surya Toto 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 Options Analysis module to analyze and evaluate options and option chains as a potential hedge for your portfolios.
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