Correlation Between Repower Asia and Bekasi Fajar
Can any of the company-specific risk be diversified away by investing in both Repower Asia and Bekasi Fajar 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 Repower Asia and Bekasi Fajar into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Repower Asia Indonesia and Bekasi Fajar Industrial, you can compare the effects of market volatilities on Repower Asia and Bekasi Fajar 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 Repower Asia with a short position of Bekasi Fajar. Check out your portfolio center. Please also check ongoing floating volatility patterns of Repower Asia and Bekasi Fajar.
Diversification Opportunities for Repower Asia and Bekasi Fajar
0.72 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Repower and Bekasi is 0.72. Overlapping area represents the amount of risk that can be diversified away by holding Repower Asia Indonesia and Bekasi Fajar Industrial in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Bekasi Fajar Industrial and Repower Asia 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 Repower Asia Indonesia are associated (or correlated) with Bekasi Fajar. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Bekasi Fajar Industrial has no effect on the direction of Repower Asia i.e., Repower Asia and Bekasi Fajar go up and down completely randomly.
Pair Corralation between Repower Asia and Bekasi Fajar
Assuming the 90 days trading horizon Repower Asia Indonesia is expected to generate 4.31 times more return on investment than Bekasi Fajar. However, Repower Asia is 4.31 times more volatile than Bekasi Fajar Industrial. It trades about 0.06 of its potential returns per unit of risk. Bekasi Fajar Industrial is currently generating about 0.02 per unit of risk. If you would invest 600.00 in Repower Asia Indonesia on August 31, 2024 and sell it today you would earn a total of 100.00 from holding Repower Asia Indonesia or generate 16.67% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Repower Asia Indonesia vs. Bekasi Fajar Industrial
Performance |
| Timeline |
| Repower Asia Indonesia |
| Bekasi Fajar Industrial |
Repower Asia and Bekasi Fajar Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Repower Asia and Bekasi Fajar
The main advantage of trading using opposite Repower Asia and Bekasi Fajar positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Repower Asia position performs unexpectedly, Bekasi Fajar 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 Bekasi Fajar will offset losses from the drop in Bekasi Fajar's long position.| Repower Asia vs. Prima Alloy Steel | Repower Asia vs. Trinitan Metals and | Repower Asia vs. PT Homeco Victoria | Repower Asia vs. Steel Pipe Industry |
| Bekasi Fajar vs. Lippo Cikarang Tbk | Bekasi Fajar vs. Lippo Karawaci Tbk | Bekasi Fajar vs. Intiland Development Tbk | Bekasi Fajar vs. Mitra Pinasthika Mustika |
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 Content Syndication module to quickly integrate customizable finance content to your own investment portal.
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