Correlation Between PT Berkah and Tecnoglass

Can any of the company-specific risk be diversified away by investing in both PT Berkah and Tecnoglass 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 Tecnoglass 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 Tecnoglass, you can compare the effects of market volatilities on PT Berkah and Tecnoglass 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 Tecnoglass. Check out your portfolio center. Please also check ongoing floating volatility patterns of PT Berkah and Tecnoglass.

Diversification Opportunities for PT Berkah and Tecnoglass

0.0

Correlation Coefficient

PT Berkah  Tecnoglass

Pay attention - limited upside

The 3 months correlation between BHBSY and Tecnoglass is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding PT Berkah Beton and Tecnoglass in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Tecnoglass 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 Tecnoglass. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Tecnoglass has no effect on the direction of PT Berkah i.e., PT Berkah and Tecnoglass go up and down completely randomly.

Pair Corralation between PT Berkah and Tecnoglass

If you would invest  6,002  in Tecnoglass on September 4, 2024 and sell it today you would earn a total of  1,993  from holding Tecnoglass or generate 33.21% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Flat
Strength	Insignificant
Accuracy	98.44%
Values	Daily Returns

PT Berkah Beton  vs.  Tecnoglass

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.

Tecnoglass

Risk-Adjusted Performance

15 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Tecnoglass are ranked lower than 15 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively weak essential indicators, Tecnoglass unveiled solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with PT Berkah and Tecnoglass

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

The idea behind PT Berkah Beton and Tecnoglass 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 Cryptocurrency Center module to build and monitor diversified portfolio of extremely risky digital assets and cryptocurrency.