Correlation Between PT Berkah and Adbri

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

By analyzing existing cross correlation between PT Berkah Beton and Adbri Limited, you can compare the effects of market volatilities on PT Berkah and Adbri 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 PT Berkah with a short position of Adbri. Check out your portfolio center. Please also check ongoing floating volatility patterns of PT Berkah and Adbri.

Diversification Opportunities for PT Berkah and Adbri

1.0

Correlation Coefficient

PT Berkah  Adbri

No risk reduction

The 3 months correlation between BHBSY and Adbri is 1.0. Overlapping area represents the amount of risk that can be diversified away by holding PT Berkah Beton and Adbri Limited in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Adbri Limited and PT Berkah 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 PT Berkah Beton are associated (or correlated) with Adbri. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Adbri Limited has no effect on the direction of PT Berkah i.e., PT Berkah and Adbri go up and down completely randomly.

Pair Corralation between PT Berkah and Adbri

If you would invest  205.00  in Adbri Limited on September 3, 2024 and sell it today you would earn a total of  0.00  from holding Adbri Limited or generate 0.0% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Very Strong
Accuracy	1.56%
Values	Daily Returns

PT Berkah Beton  vs.  Adbri Limited

PT Berkah Beton

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days PT Berkah Beton has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of fairly strong basic indicators, PT Berkah is not utilizing all of its potentials. The latest stock price disturbance, may contribute to short-term losses for the investors.

Adbri Limited

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Adbri Limited has generated negative risk-adjusted returns adding no value to investors with long positions. Despite nearly stable fundamental indicators, Adbri is not utilizing all of its potentials. The latest stock price disturbance, may contribute to mid-run losses for the stockholders.

Pair Trading with PT Berkah and Adbri

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

The idea behind PT Berkah Beton and Adbri Limited 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 Share Portfolio module to track or share privately all of your investments from the convenience of any device.