Correlation Between Bekasi Asri and Perdana Gapura

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

By analyzing existing cross correlation between Bekasi Asri Pemula and Perdana Gapura Prima, you can compare the effects of market volatilities on Bekasi Asri and Perdana Gapura 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 Bekasi Asri with a short position of Perdana Gapura. Check out your portfolio center. Please also check ongoing floating volatility patterns of Bekasi Asri and Perdana Gapura.

Diversification Opportunities for Bekasi Asri and Perdana Gapura

0.36

Correlation Coefficient

Bekasi Asri  Perdana Gapura

Weak diversification

The 3 months correlation between Bekasi and Perdana is 0.36. Overlapping area represents the amount of risk that can be diversified away by holding Bekasi Asri Pemula and Perdana Gapura Prima in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Perdana Gapura Prima and Bekasi Asri 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 Bekasi Asri Pemula are associated (or correlated) with Perdana Gapura. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Perdana Gapura Prima has no effect on the direction of Bekasi Asri i.e., Bekasi Asri and Perdana Gapura go up and down completely randomly.

Pair Corralation between Bekasi Asri and Perdana Gapura

Assuming the 90 days trading horizon Bekasi Asri Pemula is expected to under-perform the Perdana Gapura. In addition to that, Bekasi Asri is 1.5 times more volatile than Perdana Gapura Prima. It trades about -0.07 of its total potential returns per unit of risk. Perdana Gapura Prima is currently generating about -0.01 per unit of volatility. If you would invest  9,100  in Perdana Gapura Prima on September 5, 2024 and sell it today you would lose (200.00) from holding Perdana Gapura Prima or give up 2.2% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Very Weak
Accuracy	98.41%
Values	Daily Returns

Bekasi Asri Pemula  vs.  Perdana Gapura Prima

Bekasi Asri Pemula

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Bekasi Asri Pemula has generated negative risk-adjusted returns adding no value to investors with long positions. Despite latest conflicting performance, the Stock's forward-looking signals remain persistent and the latest mess on Wall Street may also be a sign of long-standing gains for the company institutional investors.

Perdana Gapura Prima

Risk-Adjusted Performance

0 of 100

Very Weak

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

Pair Trading with Bekasi Asri and Perdana Gapura

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

The idea behind Bekasi Asri Pemula and Perdana Gapura Prima 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 Crypto Correlations module to use cryptocurrency correlation module to diversify your cryptocurrency portfolio across multiple coins.