Correlation Between Transkon Jaya and Batavia Prosperindo
Can any of the company-specific risk be diversified away by investing in both Transkon Jaya and Batavia Prosperindo 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 Transkon Jaya and Batavia Prosperindo into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Transkon Jaya Pt and Batavia Prosperindo Trans, you can compare the effects of market volatilities on Transkon Jaya and Batavia Prosperindo 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 Transkon Jaya with a short position of Batavia Prosperindo. Check out your portfolio center. Please also check ongoing floating volatility patterns of Transkon Jaya and Batavia Prosperindo.
Diversification Opportunities for Transkon Jaya and Batavia Prosperindo
0.63 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Transkon and Batavia is 0.63. Overlapping area represents the amount of risk that can be diversified away by holding Transkon Jaya Pt and Batavia Prosperindo Trans in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Batavia Prosperindo Trans and Transkon Jaya 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 Transkon Jaya Pt are associated (or correlated) with Batavia Prosperindo. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Batavia Prosperindo Trans has no effect on the direction of Transkon Jaya i.e., Transkon Jaya and Batavia Prosperindo go up and down completely randomly.
Pair Corralation between Transkon Jaya and Batavia Prosperindo
Assuming the 90 days trading horizon Transkon Jaya Pt is expected to generate 0.7 times more return on investment than Batavia Prosperindo. However, Transkon Jaya Pt is 1.43 times less risky than Batavia Prosperindo. It trades about 0.02 of its potential returns per unit of risk. Batavia Prosperindo Trans is currently generating about 0.0 per unit of risk. If you would invest 19,300 in Transkon Jaya Pt on September 2, 2024 and sell it today you would earn a total of 300.00 from holding Transkon Jaya Pt or generate 1.55% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Transkon Jaya Pt vs. Batavia Prosperindo Trans
Performance |
| Timeline |
| Transkon Jaya Pt |
| Batavia Prosperindo Trans |
Transkon Jaya and Batavia Prosperindo Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Transkon Jaya and Batavia Prosperindo
The main advantage of trading using opposite Transkon Jaya and Batavia Prosperindo positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Transkon Jaya position performs unexpectedly, Batavia Prosperindo 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 Batavia Prosperindo will offset losses from the drop in Batavia Prosperindo's long position.| Transkon Jaya vs. Pelayaran Nelly Dwi | Transkon Jaya vs. Guna Timur Raya | Transkon Jaya vs. Batavia Prosperindo Trans | Transkon Jaya vs. PT Trimuda Nuansa |
| Batavia Prosperindo vs. PT Trimuda Nuansa | Batavia Prosperindo vs. Adi Sarana Armada | Batavia Prosperindo vs. Weha Transportasi Indonesia | Batavia Prosperindo vs. Blue Bird 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 Correlation Analysis module to reduce portfolio risk simply by holding instruments which are not perfectly correlated.
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