Correlation Between Bangun Karya and PT Hetzer

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

By analyzing existing cross correlation between Bangun Karya Perkasa and PT Hetzer Medical, you can compare the effects of market volatilities on Bangun Karya and PT Hetzer 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 Bangun Karya with a short position of PT Hetzer. Check out your portfolio center. Please also check ongoing floating volatility patterns of Bangun Karya and PT Hetzer.

Diversification Opportunities for Bangun Karya and PT Hetzer

0.0

Correlation Coefficient

Bangun Karya  PT Hetzer

Pay attention - limited upside

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

Pair Corralation between Bangun Karya and PT Hetzer

Assuming the 90 days trading horizon Bangun Karya Perkasa is expected to under-perform the PT Hetzer. In addition to that, Bangun Karya is 1.01 times more volatile than PT Hetzer Medical. It trades about -0.09 of its total potential returns per unit of risk. PT Hetzer Medical is currently generating about -0.04 per unit of volatility. If you would invest  16,600  in PT Hetzer Medical on September 4, 2024 and sell it today you would lose (11,600) from holding PT Hetzer Medical or give up 69.88% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Flat
Strength	Insignificant
Accuracy	100.0%
Values	Daily Returns

Bangun Karya Perkasa  vs.  PT Hetzer Medical

Bangun Karya Perkasa

Risk-Adjusted Performance

0 of 100

Very Weak

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

PT Hetzer Medical

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days PT Hetzer Medical has generated negative risk-adjusted returns adding no value to investors with long positions. Despite quite persistent forward-looking signals, PT Hetzer 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 Bangun Karya and PT Hetzer

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

The idea behind Bangun Karya Perkasa and PT Hetzer Medical 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 Headlines Timeline module to stay connected to all market stories and filter out noise. Drill down to analyze hype elasticity.