Correlation Between Steel Pipe and Betonjaya Manunggal
Can any of the company-specific risk be diversified away by investing in both Steel Pipe and Betonjaya Manunggal 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 Betonjaya Manunggal 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 Betonjaya Manunggal Tbk, you can compare the effects of market volatilities on Steel Pipe and Betonjaya Manunggal 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 Betonjaya Manunggal. Check out your portfolio center. Please also check ongoing floating volatility patterns of Steel Pipe and Betonjaya Manunggal.
Diversification Opportunities for Steel Pipe and Betonjaya Manunggal
0.33 | Correlation Coefficient |
Weak diversification
The 3 months correlation between Steel and Betonjaya is 0.33. Overlapping area represents the amount of risk that can be diversified away by holding Steel Pipe Industry and Betonjaya Manunggal Tbk in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Betonjaya Manunggal Tbk 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 Betonjaya Manunggal. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Betonjaya Manunggal Tbk has no effect on the direction of Steel Pipe i.e., Steel Pipe and Betonjaya Manunggal go up and down completely randomly.
Pair Corralation between Steel Pipe and Betonjaya Manunggal
Assuming the 90 days trading horizon Steel Pipe Industry is expected to generate 0.61 times more return on investment than Betonjaya Manunggal. However, Steel Pipe Industry is 1.63 times less risky than Betonjaya Manunggal. It trades about 0.04 of its potential returns per unit of risk. Betonjaya Manunggal Tbk is currently generating about 0.0 per unit of risk. If you would invest 24,534 in Steel Pipe Industry on August 31, 2024 and sell it today you would earn a total of 3,866 from holding Steel Pipe Industry or generate 15.76% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 99.44% |
| Values | Daily Returns |
Steel Pipe Industry vs. Betonjaya Manunggal Tbk
Performance |
| Timeline |
| Steel Pipe Industry |
| Betonjaya Manunggal Tbk |
Steel Pipe and Betonjaya Manunggal Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Steel Pipe and Betonjaya Manunggal
The main advantage of trading using opposite Steel Pipe and Betonjaya Manunggal positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Steel Pipe position performs unexpectedly, Betonjaya Manunggal 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 Betonjaya Manunggal will offset losses from the drop in Betonjaya Manunggal's long position.| Steel Pipe vs. Perusahaan Gas Negara | Steel Pipe vs. Vale Indonesia Tbk | Steel Pipe vs. Telkom Indonesia Tbk | Steel Pipe vs. Mitra Pinasthika Mustika |
| Betonjaya Manunggal vs. Alumindo Light Metal | Betonjaya Manunggal vs. Duta Pertiwi Nusantara | Betonjaya Manunggal vs. Berlina Tbk | Betonjaya Manunggal vs. Asiaplast Industries 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 Share Portfolio module to track or share privately all of your investments from the convenience of any device.
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