Correlation Between Perusahaan Perkebunan and Bukit Asam
Can any of the company-specific risk be diversified away by investing in both Perusahaan Perkebunan and Bukit Asam 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 Perusahaan Perkebunan and Bukit Asam into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Perusahaan Perkebunan London and Bukit Asam Tbk, you can compare the effects of market volatilities on Perusahaan Perkebunan and Bukit Asam 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 Perusahaan Perkebunan with a short position of Bukit Asam. Check out your portfolio center. Please also check ongoing floating volatility patterns of Perusahaan Perkebunan and Bukit Asam.
Diversification Opportunities for Perusahaan Perkebunan and Bukit Asam
0.24 | Correlation Coefficient |
Modest diversification
The 3 months correlation between Perusahaan and Bukit is 0.24. Overlapping area represents the amount of risk that can be diversified away by holding Perusahaan Perkebunan London and Bukit Asam Tbk in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Bukit Asam Tbk and Perusahaan Perkebunan 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 Perusahaan Perkebunan London are associated (or correlated) with Bukit Asam. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Bukit Asam Tbk has no effect on the direction of Perusahaan Perkebunan i.e., Perusahaan Perkebunan and Bukit Asam go up and down completely randomly.
Pair Corralation between Perusahaan Perkebunan and Bukit Asam
Assuming the 90 days trading horizon Perusahaan Perkebunan London is expected to under-perform the Bukit Asam. In addition to that, Perusahaan Perkebunan is 1.8 times more volatile than Bukit Asam Tbk. It trades about -0.27 of its total potential returns per unit of risk. Bukit Asam Tbk is currently generating about -0.1 per unit of volatility. If you would invest 288,000 in Bukit Asam Tbk on August 26, 2024 and sell it today you would lose (11,000) from holding Bukit Asam Tbk or give up 3.82% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Perusahaan Perkebunan London vs. Bukit Asam Tbk
Performance |
| Timeline |
| Perusahaan Perkebunan |
| Bukit Asam Tbk |
Perusahaan Perkebunan and Bukit Asam Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Perusahaan Perkebunan and Bukit Asam
The main advantage of trading using opposite Perusahaan Perkebunan and Bukit Asam positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Perusahaan Perkebunan position performs unexpectedly, Bukit Asam 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 Bukit Asam will offset losses from the drop in Bukit Asam's long position.| Perusahaan Perkebunan vs. Charoen Pokphand Indonesia | Perusahaan Perkebunan vs. Kalbe Farma Tbk | Perusahaan Perkebunan vs. Indofood Cbp Sukses | Perusahaan Perkebunan vs. Akr Corporindo Tbk |
| Bukit Asam vs. Perusahaan Gas Negara | Bukit Asam vs. Indo Tambangraya Megah | Bukit Asam vs. Aneka Tambang Persero | Bukit Asam vs. Adaro Energy 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 Idea Breakdown module to analyze constituents of all Macroaxis ideas. Macroaxis investment ideas are predefined, sector-focused investing themes.
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