Correlation Between Unggul Indah and Hartadinata Abadi
Can any of the company-specific risk be diversified away by investing in both Unggul Indah and Hartadinata Abadi 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 Unggul Indah and Hartadinata Abadi into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Unggul Indah Cahaya and Hartadinata Abadi Tbk, you can compare the effects of market volatilities on Unggul Indah and Hartadinata Abadi 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 Unggul Indah with a short position of Hartadinata Abadi. Check out your portfolio center. Please also check ongoing floating volatility patterns of Unggul Indah and Hartadinata Abadi.
Diversification Opportunities for Unggul Indah and Hartadinata Abadi
0.37 | Correlation Coefficient |
Weak diversification
The 3 months correlation between Unggul and Hartadinata is 0.37. Overlapping area represents the amount of risk that can be diversified away by holding Unggul Indah Cahaya and Hartadinata Abadi Tbk in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Hartadinata Abadi Tbk and Unggul Indah 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 Unggul Indah Cahaya are associated (or correlated) with Hartadinata Abadi. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Hartadinata Abadi Tbk has no effect on the direction of Unggul Indah i.e., Unggul Indah and Hartadinata Abadi go up and down completely randomly.
Pair Corralation between Unggul Indah and Hartadinata Abadi
Assuming the 90 days trading horizon Unggul Indah Cahaya is expected to generate 0.25 times more return on investment than Hartadinata Abadi. However, Unggul Indah Cahaya is 4.04 times less risky than Hartadinata Abadi. It trades about -0.15 of its potential returns per unit of risk. Hartadinata Abadi Tbk is currently generating about -0.45 per unit of risk. If you would invest 810,000 in Unggul Indah Cahaya on August 25, 2024 and sell it today you would lose (15,000) from holding Unggul Indah Cahaya or give up 1.85% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Unggul Indah Cahaya vs. Hartadinata Abadi Tbk
Performance |
| Timeline |
| Unggul Indah Cahaya |
| Hartadinata Abadi Tbk |
Unggul Indah and Hartadinata Abadi Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Unggul Indah and Hartadinata Abadi
The main advantage of trading using opposite Unggul Indah and Hartadinata Abadi positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Unggul Indah position performs unexpectedly, Hartadinata Abadi 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 Hartadinata Abadi will offset losses from the drop in Hartadinata Abadi's long position.| Unggul Indah vs. Kedaung Indah Can | Unggul Indah vs. Langgeng Makmur Industri | Unggul Indah vs. Kabelindo Murni Tbk | Unggul Indah vs. Mustika Ratu Tbk |
| Hartadinata Abadi vs. Steel Pipe Industry | Hartadinata Abadi vs. Puradelta Lestari PT | Hartadinata Abadi vs. Jasa Armada Indonesia | Hartadinata Abadi vs. Integra Indocabinet 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 Global Correlations module to find global opportunities by holding instruments from different markets.
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