Correlation Between Batavia Prosperindo and Guna Timur
Can any of the company-specific risk be diversified away by investing in both Batavia Prosperindo and Guna Timur 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 Batavia Prosperindo and Guna Timur into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Batavia Prosperindo Trans and Guna Timur Raya, you can compare the effects of market volatilities on Batavia Prosperindo and Guna Timur 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 Batavia Prosperindo with a short position of Guna Timur. Check out your portfolio center. Please also check ongoing floating volatility patterns of Batavia Prosperindo and Guna Timur.
Diversification Opportunities for Batavia Prosperindo and Guna Timur
0.71 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Batavia and Guna is 0.71. Overlapping area represents the amount of risk that can be diversified away by holding Batavia Prosperindo Trans and Guna Timur Raya in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Guna Timur Raya and Batavia Prosperindo 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 Batavia Prosperindo Trans are associated (or correlated) with Guna Timur. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Guna Timur Raya has no effect on the direction of Batavia Prosperindo i.e., Batavia Prosperindo and Guna Timur go up and down completely randomly.
Pair Corralation between Batavia Prosperindo and Guna Timur
Assuming the 90 days trading horizon Batavia Prosperindo Trans is expected to generate 0.39 times more return on investment than Guna Timur. However, Batavia Prosperindo Trans is 2.53 times less risky than Guna Timur. It trades about -0.11 of its potential returns per unit of risk. Guna Timur Raya is currently generating about -0.07 per unit of risk. If you would invest 9,800 in Batavia Prosperindo Trans on September 16, 2024 and sell it today you would lose (1,100) from holding Batavia Prosperindo Trans or give up 11.22% of portfolio value over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Together |
Strength | Significant |
Accuracy | 100.0% |
Values | Daily Returns |
Batavia Prosperindo Trans vs. Guna Timur Raya
Performance |
Timeline |
Batavia Prosperindo Trans |
Guna Timur Raya |
Batavia Prosperindo and Guna Timur Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Batavia Prosperindo and Guna Timur
The main advantage of trading using opposite Batavia Prosperindo and Guna Timur positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Batavia Prosperindo position performs unexpectedly, Guna Timur 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 Guna Timur will offset losses from the drop in Guna Timur's long position.Batavia Prosperindo vs. PT Trimuda Nuansa | Batavia Prosperindo vs. Adi Sarana Armada | Batavia Prosperindo vs. Weha Transportasi Indonesia | Batavia Prosperindo vs. Blue Bird Tbk |
Guna Timur vs. PT Trimuda Nuansa | Guna Timur vs. Yelooo Integra Datanet | Guna Timur vs. Transcoal Pacific Tbk | Guna Timur vs. Weha Transportasi Indonesia |
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 Bonds Directory module to find actively traded corporate debentures issued by US companies.
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