Correlation Between Asuransi Multi and Asuransi Harta

Can any of the company-specific risk be diversified away by investing in both Asuransi Multi and Asuransi Harta 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 Asuransi Multi and Asuransi Harta into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Asuransi Multi Artha and Asuransi Harta Aman, you can compare the effects of market volatilities on Asuransi Multi and Asuransi Harta 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 Asuransi Multi with a short position of Asuransi Harta. Check out your portfolio center. Please also check ongoing floating volatility patterns of Asuransi Multi and Asuransi Harta.

Diversification Opportunities for Asuransi Multi and Asuransi Harta

0.53

Correlation Coefficient

Asuransi Multi  Asuransi Harta

Very weak diversification

The 3 months correlation between Asuransi and Asuransi is 0.53. Overlapping area represents the amount of risk that can be diversified away by holding Asuransi Multi Artha and Asuransi Harta Aman in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Asuransi Harta Aman and Asuransi Multi 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 Asuransi Multi Artha are associated (or correlated) with Asuransi Harta. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Asuransi Harta Aman has no effect on the direction of Asuransi Multi i.e., Asuransi Multi and Asuransi Harta go up and down completely randomly.

Pair Corralation between Asuransi Multi and Asuransi Harta

Assuming the 90 days trading horizon Asuransi Multi is expected to generate 5.44 times less return on investment than Asuransi Harta. But when comparing it to its historical volatility, Asuransi Multi Artha is 3.26 times less risky than Asuransi Harta. It trades about 0.02 of its potential returns per unit of risk. Asuransi Harta Aman is currently generating about 0.03 of returns per unit of risk over similar time horizon. If you would invest  8,000  in Asuransi Harta Aman on September 13, 2024 and sell it today you would earn a total of  1,300  from holding Asuransi Harta Aman or generate 16.25% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Weak
Accuracy	99.79%
Values	Daily Returns

Asuransi Multi Artha  vs.  Asuransi Harta Aman

Asuransi Multi Artha

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Asuransi Multi Artha has generated negative risk-adjusted returns adding no value to investors with long positions. Despite quite persistent forward-looking signals, Asuransi Multi is not utilizing all of its potentials. The latest stock price mess, may contribute to short-term losses for the institutional investors.

Asuransi Harta Aman

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Asuransi Harta Aman has generated negative risk-adjusted returns adding no value to investors with long positions. Despite conflicting performance in the last few months, the Stock's forward-looking signals remain quite persistent which may send shares a bit higher in January 2025. The latest mess may also be a sign of long-standing up-swing for the company institutional investors.

Pair Trading with Asuransi Multi and Asuransi Harta

The main advantage of trading using opposite Asuransi Multi and Asuransi Harta positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Asuransi Multi position performs unexpectedly, Asuransi Harta 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 Asuransi Harta will offset losses from the drop in Asuransi Harta's long position.

The idea behind Asuransi Multi Artha and Asuransi Harta Aman 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.

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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 Risk-Return Analysis module to view associations between returns expected from investment and the risk you assume.