Correlation Between Hensel Davest and Berkah Prima

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

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

Diversification Opportunities for Hensel Davest and Berkah Prima

0.17

Correlation Coefficient

Hensel Davest  Berkah Prima

Average diversification

The 3 months correlation between Hensel and Berkah is 0.17. Overlapping area represents the amount of risk that can be diversified away by holding Hensel Davest Indonesia and Berkah Prima Perkasa in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Berkah Prima Perkasa and Hensel Davest 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 Hensel Davest Indonesia are associated (or correlated) with Berkah Prima. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Berkah Prima Perkasa has no effect on the direction of Hensel Davest i.e., Hensel Davest and Berkah Prima go up and down completely randomly.

Pair Corralation between Hensel Davest and Berkah Prima

Assuming the 90 days trading horizon Hensel Davest Indonesia is expected to under-perform the Berkah Prima. In addition to that, Hensel Davest is 4.47 times more volatile than Berkah Prima Perkasa. It trades about -0.13 of its total potential returns per unit of risk. Berkah Prima Perkasa is currently generating about -0.02 per unit of volatility. If you would invest  34,000  in Berkah Prima Perkasa on September 15, 2024 and sell it today you would lose (600.00) from holding Berkah Prima Perkasa or give up 1.76% of portfolio value over 90 days.

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

Hensel Davest Indonesia  vs.  Berkah Prima Perkasa

Hensel Davest Indonesia

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Hensel Davest Indonesia 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.

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.

Pair Trading with Hensel Davest and Berkah Prima

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

The idea behind Hensel Davest Indonesia and Berkah Prima Perkasa 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 Alpha Finder module to use alpha and beta coefficients to find investment opportunities after accounting for the risk.