Correlation Between Bekasi Fajar and Surya Semesta

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

By analyzing existing cross correlation between Bekasi Fajar Industrial and Surya Semesta Internusa, you can compare the effects of market volatilities on Bekasi Fajar and Surya Semesta 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 Fajar with a short position of Surya Semesta. Check out your portfolio center. Please also check ongoing floating volatility patterns of Bekasi Fajar and Surya Semesta.

Diversification Opportunities for Bekasi Fajar and Surya Semesta

0.93

Correlation Coefficient

Bekasi Fajar  Surya Semesta

Almost no diversification

The 3 months correlation between Bekasi and Surya is 0.93. Overlapping area represents the amount of risk that can be diversified away by holding Bekasi Fajar Industrial and Surya Semesta Internusa in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Surya Semesta Internusa and Bekasi Fajar 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 Fajar Industrial are associated (or correlated) with Surya Semesta. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Surya Semesta Internusa has no effect on the direction of Bekasi Fajar i.e., Bekasi Fajar and Surya Semesta go up and down completely randomly.

Pair Corralation between Bekasi Fajar and Surya Semesta

Assuming the 90 days trading horizon Bekasi Fajar Industrial is expected to under-perform the Surya Semesta. But the stock apears to be less risky and, when comparing its historical volatility, Bekasi Fajar Industrial is 1.73 times less risky than Surya Semesta. The stock trades about -0.02 of its potential returns per unit of risk. The Surya Semesta Internusa is currently generating about 0.1 of returns per unit of risk over similar time horizon. If you would invest  27,105  in Surya Semesta Internusa on September 20, 2024 and sell it today you would earn a total of  78,395  from holding Surya Semesta Internusa or generate 289.23% return on investment over 90 days.

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

Bekasi Fajar Industrial  vs.  Surya Semesta Internusa

Bekasi Fajar Industrial

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Bekasi Fajar Industrial 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.

Surya Semesta Internusa

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Surya Semesta Internusa 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 Bekasi Fajar and Surya Semesta

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

The idea behind Bekasi Fajar Industrial and Surya Semesta Internusa 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.

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 Alpha Finder module to use alpha and beta coefficients to find investment opportunities after accounting for the risk.