Correlation Between Berkah Prima and Arkha Jayanti

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

By analyzing existing cross correlation between Berkah Prima Perkasa and Arkha Jayanti Persada, you can compare the effects of market volatilities on Berkah Prima and Arkha Jayanti 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 Berkah Prima with a short position of Arkha Jayanti. Check out your portfolio center. Please also check ongoing floating volatility patterns of Berkah Prima and Arkha Jayanti.

Diversification Opportunities for Berkah Prima and Arkha Jayanti

-0.7

Correlation Coefficient

Berkah Prima  Arkha Jayanti

Excellent diversification

The 3 months correlation between Berkah and Arkha is -0.7. Overlapping area represents the amount of risk that can be diversified away by holding Berkah Prima Perkasa and Arkha Jayanti Persada in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Arkha Jayanti Persada and Berkah Prima 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 Berkah Prima Perkasa are associated (or correlated) with Arkha Jayanti. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Arkha Jayanti Persada has no effect on the direction of Berkah Prima i.e., Berkah Prima and Arkha Jayanti go up and down completely randomly.

Pair Corralation between Berkah Prima and Arkha Jayanti

Assuming the 90 days trading horizon Berkah Prima Perkasa is expected to under-perform the Arkha Jayanti. But the stock apears to be less risky and, when comparing its historical volatility, Berkah Prima Perkasa is 4.1 times less risky than Arkha Jayanti. The stock trades about -0.01 of its potential returns per unit of risk. The Arkha Jayanti Persada is currently generating about 0.64 of returns per unit of risk over similar time horizon. If you would invest  1,400  in Arkha Jayanti Persada on September 27, 2024 and sell it today you would earn a total of  1,500  from holding Arkha Jayanti Persada or generate 107.14% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Weak
Accuracy	100.0%
Values	Daily Returns

Berkah Prima Perkasa  vs.  Arkha Jayanti Persada

Berkah Prima Perkasa

Risk-Adjusted Performance

0 of 100

Very Weak

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

Arkha Jayanti Persada

Risk-Adjusted Performance

17 of 100

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in Arkha Jayanti Persada are ranked lower than 17 (%) of all global equities and portfolios over the last 90 days. Despite quite conflicting forward-looking signals, Arkha Jayanti disclosed solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Berkah Prima and Arkha Jayanti

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

The idea behind Berkah Prima Perkasa and Arkha Jayanti Persada 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 Equity Valuation module to check real value of public entities based on technical and fundamental data.