Correlation Between Steel Pipe and Berkah Beton
Can any of the company-specific risk be diversified away by investing in both Steel Pipe and Berkah Beton 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 Steel Pipe and Berkah Beton into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Steel Pipe Industry and Berkah Beton Sadaya, you can compare the effects of market volatilities on Steel Pipe and Berkah Beton 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 Steel Pipe with a short position of Berkah Beton. Check out your portfolio center. Please also check ongoing floating volatility patterns of Steel Pipe and Berkah Beton.
Diversification Opportunities for Steel Pipe and Berkah Beton
0.63 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Steel and Berkah is 0.63. Overlapping area represents the amount of risk that can be diversified away by holding Steel Pipe Industry and Berkah Beton Sadaya in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Berkah Beton Sadaya and Steel Pipe 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 Steel Pipe Industry are associated (or correlated) with Berkah Beton. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Berkah Beton Sadaya has no effect on the direction of Steel Pipe i.e., Steel Pipe and Berkah Beton go up and down completely randomly.
Pair Corralation between Steel Pipe and Berkah Beton
Assuming the 90 days trading horizon Steel Pipe Industry is expected to generate 0.23 times more return on investment than Berkah Beton. However, Steel Pipe Industry is 4.3 times less risky than Berkah Beton. It trades about 0.03 of its potential returns per unit of risk. Berkah Beton Sadaya is currently generating about -0.12 per unit of risk. If you would invest 23,419 in Steel Pipe Industry on September 3, 2024 and sell it today you would earn a total of 4,981 from holding Steel Pipe Industry or generate 21.27% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 99.58% |
| Values | Daily Returns |
Steel Pipe Industry vs. Berkah Beton Sadaya
Performance |
| Timeline |
| Steel Pipe Industry |
| Berkah Beton Sadaya |
Steel Pipe and Berkah Beton Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Steel Pipe and Berkah Beton
The main advantage of trading using opposite Steel Pipe and Berkah Beton positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Steel Pipe position performs unexpectedly, Berkah Beton 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 Berkah Beton will offset losses from the drop in Berkah Beton's long position.| Steel Pipe vs. Timah Persero Tbk | Steel Pipe vs. Semen Indonesia Persero | Steel Pipe vs. Mitra Pinasthika Mustika | Steel Pipe vs. Jakarta Int Hotels |
| Berkah Beton vs. Bk Harda Internasional | Berkah Beton vs. Bank Net Indonesia | Berkah Beton vs. Bank Yudha Bhakti | Berkah Beton vs. Medikaloka Hermina PT |
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 USA ETFs module to find actively traded Exchange Traded Funds (ETF) in USA.
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