Correlation Between Sido Muncul and Bekasi Fajar
Can any of the company-specific risk be diversified away by investing in both Sido Muncul 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 Sido Muncul and Bekasi Fajar into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Sido Muncul PT and Bekasi Fajar Industrial, you can compare the effects of market volatilities on Sido Muncul 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 Sido Muncul with a short position of Bekasi Fajar. Check out your portfolio center. Please also check ongoing floating volatility patterns of Sido Muncul and Bekasi Fajar.
Diversification Opportunities for Sido Muncul and Bekasi Fajar
0.68 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Sido and Bekasi is 0.68. Overlapping area represents the amount of risk that can be diversified away by holding Sido Muncul PT 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 Sido Muncul 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 Sido Muncul PT 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 Sido Muncul i.e., Sido Muncul and Bekasi Fajar go up and down completely randomly.
Pair Corralation between Sido Muncul and Bekasi Fajar
Assuming the 90 days trading horizon Sido Muncul PT is expected to generate 0.8 times more return on investment than Bekasi Fajar. However, Sido Muncul PT is 1.25 times less risky than Bekasi Fajar. It trades about -0.05 of its potential returns per unit of risk. Bekasi Fajar Industrial is currently generating about -0.31 per unit of risk. If you would invest 59,185 in Sido Muncul PT on August 28, 2024 and sell it today you would lose (1,185) from holding Sido Muncul PT or give up 2.0% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Sido Muncul PT vs. Bekasi Fajar Industrial
Performance |
| Timeline |
| Sido Muncul PT |
| Bekasi Fajar Industrial |
Sido Muncul and Bekasi Fajar Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Sido Muncul and Bekasi Fajar
The main advantage of trading using opposite Sido Muncul and Bekasi Fajar positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Sido Muncul 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.The idea behind Sido Muncul PT and Bekasi Fajar Industrial pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.| Bekasi Fajar vs. Agung Podomoro Land | Bekasi Fajar vs. Surya Semesta Internusa | Bekasi Fajar vs. Alam Sutera Realty | Bekasi Fajar vs. Bumi Serpong Damai |
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 Global Markets Map module to get a quick overview of global market snapshot using zoomable world map. Drill down to check world indexes.
Other Complementary Tools
| Bonds Directory Find actively traded corporate debentures issued by US companies | |
| Options Analysis Analyze and evaluate options and option chains as a potential hedge for your portfolios | |
| Equity Analysis Research over 250,000 global equities including funds, stocks and ETFs to find investment opportunities | |
| Transaction History View history of all your transactions and understand their impact on performance | |
| Risk-Return Analysis View associations between returns expected from investment and the risk you assume |