Correlation Between PT Temas and Buana Listya
Can any of the company-specific risk be diversified away by investing in both PT Temas and Buana Listya 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 PT Temas and Buana Listya into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between PT Temas Tbk and Buana Listya Tama, you can compare the effects of market volatilities on PT Temas and Buana Listya 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 PT Temas with a short position of Buana Listya. Check out your portfolio center. Please also check ongoing floating volatility patterns of PT Temas and Buana Listya.
Diversification Opportunities for PT Temas and Buana Listya
0.53 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between TMAS and Buana is 0.53. Overlapping area represents the amount of risk that can be diversified away by holding PT Temas Tbk and Buana Listya Tama in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Buana Listya Tama and PT Temas 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 PT Temas Tbk are associated (or correlated) with Buana Listya. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Buana Listya Tama has no effect on the direction of PT Temas i.e., PT Temas and Buana Listya go up and down completely randomly.
Pair Corralation between PT Temas and Buana Listya
Assuming the 90 days trading horizon PT Temas Tbk is expected to under-perform the Buana Listya. But the stock apears to be less risky and, when comparing its historical volatility, PT Temas Tbk is 3.11 times less risky than Buana Listya. The stock trades about -0.06 of its potential returns per unit of risk. The Buana Listya Tama is currently generating about 0.04 of returns per unit of risk over similar time horizon. If you would invest 10,600 in Buana Listya Tama on August 29, 2024 and sell it today you would earn a total of 500.00 from holding Buana Listya Tama or generate 4.72% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
PT Temas Tbk vs. Buana Listya Tama
Performance |
| Timeline |
| PT Temas Tbk |
| Buana Listya Tama |
PT Temas and Buana Listya Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with PT Temas and Buana Listya
The main advantage of trading using opposite PT Temas and Buana Listya positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if PT Temas position performs unexpectedly, Buana Listya 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 Buana Listya will offset losses from the drop in Buana Listya's long position.| PT Temas vs. Samudera Indonesia Tbk | PT Temas vs. Weha Transportasi Indonesia | PT Temas vs. Rig Tenders Tbk | PT Temas vs. Total Bangun Persada |
| Buana Listya vs. City Retail Developments | Buana Listya vs. PT Homeco Victoria | Buana Listya vs. Weha Transportasi Indonesia | Buana Listya vs. First Media 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 Fundamentals Comparison module to compare fundamentals across multiple equities to find investing opportunities.
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