Correlation Between Maskapai Reasuransi and Asuransi Harta

Can any of the company-specific risk be diversified away by investing in both Maskapai Reasuransi and Asuransi Harta 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 Maskapai Reasuransi and Asuransi Harta into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Maskapai Reasuransi Indonesia and Asuransi Harta Aman, you can compare the effects of market volatilities on Maskapai Reasuransi and Asuransi Harta 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 Maskapai Reasuransi with a short position of Asuransi Harta. Check out your portfolio center. Please also check ongoing floating volatility patterns of Maskapai Reasuransi and Asuransi Harta.

Diversification Opportunities for Maskapai Reasuransi and Asuransi Harta

0.82

Correlation Coefficient

Maskapai Reasuransi  Asuransi Harta

Very poor diversification

The 3 months correlation between Maskapai and Asuransi is 0.82. Overlapping area represents the amount of risk that can be diversified away by holding Maskapai Reasuransi Indonesia and Asuransi Harta Aman in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Asuransi Harta Aman and Maskapai Reasuransi 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 Maskapai Reasuransi Indonesia are associated (or correlated) with Asuransi Harta. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Asuransi Harta Aman has no effect on the direction of Maskapai Reasuransi i.e., Maskapai Reasuransi and Asuransi Harta go up and down completely randomly.

Pair Corralation between Maskapai Reasuransi and Asuransi Harta

Assuming the 90 days trading horizon Maskapai Reasuransi Indonesia is expected to under-perform the Asuransi Harta. But the stock apears to be less risky and, when comparing its historical volatility, Maskapai Reasuransi Indonesia is 1.28 times less risky than Asuransi Harta. The stock trades about -0.06 of its potential returns per unit of risk. The Asuransi Harta Aman is currently generating about 0.03 of returns per unit of risk over similar time horizon. If you would invest  8,100  in Asuransi Harta Aman on September 12, 2024 and sell it today you would earn a total of  1,200  from holding Asuransi Harta Aman or generate 14.81% return on investment over 90 days.

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

Maskapai Reasuransi Indonesia  vs.  Asuransi Harta Aman

Maskapai Reasuransi

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Maskapai Reasuransi Indonesia has generated negative risk-adjusted returns adding no value to investors with long positions. Despite latest conflicting performance, the Stock's forward-looking signals remain persistent and the latest mess on Wall Street may also be a sign of long-standing gains for the company institutional investors.

Asuransi Harta Aman

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Asuransi Harta Aman 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.

Pair Trading with Maskapai Reasuransi and Asuransi Harta

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

The idea behind Maskapai Reasuransi Indonesia and Asuransi Harta Aman 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 Theme Ratings module to determine theme ratings based on digital equity recommendations. Macroaxis theme ratings are based on combination of fundamental analysis and risk-adjusted market performance.