Correlation Between Pelayaran Nasional and Buana Listya

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

By analyzing existing cross correlation between Pelayaran Nasional Bina and Buana Listya Tama, you can compare the effects of market volatilities on Pelayaran Nasional 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 Pelayaran Nasional with a short position of Buana Listya. Check out your portfolio center. Please also check ongoing floating volatility patterns of Pelayaran Nasional and Buana Listya.

Diversification Opportunities for Pelayaran Nasional and Buana Listya

0.77

Correlation Coefficient

Pelayaran Nasional  Buana Listya

Poor diversification

The 3 months correlation between Pelayaran and Buana is 0.77. Overlapping area represents the amount of risk that can be diversified away by holding Pelayaran Nasional Bina 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 Pelayaran Nasional 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 Pelayaran Nasional Bina 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 Pelayaran Nasional i.e., Pelayaran Nasional and Buana Listya go up and down completely randomly.

Pair Corralation between Pelayaran Nasional and Buana Listya

Assuming the 90 days trading horizon Pelayaran Nasional Bina is expected to under-perform the Buana Listya. But the stock apears to be less risky and, when comparing its historical volatility, Pelayaran Nasional Bina is 1.49 times less risky than Buana Listya. The stock trades about -0.03 of its potential returns per unit of risk. The Buana Listya Tama is currently generating about 0.02 of returns per unit of risk over similar time horizon. If you would invest  11,900  in Buana Listya Tama on September 17, 2024 and sell it today you would earn a total of  100.00  from holding Buana Listya Tama or generate 0.84% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Significant
Accuracy	98.46%
Values	Daily Returns

Pelayaran Nasional Bina  vs.  Buana Listya Tama

Pelayaran Nasional Bina

Risk-Adjusted Performance

0 of 100

Very Weak

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

Buana Listya Tama

Risk-Adjusted Performance

1 of 100

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Buana Listya Tama are ranked lower than 1 (%) of all global equities and portfolios over the last 90 days. Despite quite persistent forward-looking signals, Buana Listya 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 Pelayaran Nasional and Buana Listya

The main advantage of trading using opposite Pelayaran Nasional and Buana Listya positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Pelayaran Nasional 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.

The idea behind Pelayaran Nasional Bina and Buana Listya Tama 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 Idea Optimizer module to use advanced portfolio builder with pre-computed micro ideas to build optimal portfolio .