Correlation Between Anugerah Kagum and Berlina Tbk

Can any of the company-specific risk be diversified away by investing in both Anugerah Kagum and Berlina Tbk 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 Anugerah Kagum and Berlina Tbk into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Anugerah Kagum Karya and Berlina Tbk, you can compare the effects of market volatilities on Anugerah Kagum and Berlina Tbk 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 Anugerah Kagum with a short position of Berlina Tbk. Check out your portfolio center. Please also check ongoing floating volatility patterns of Anugerah Kagum and Berlina Tbk.

Diversification Opportunities for Anugerah Kagum and Berlina Tbk

-0.29

Correlation Coefficient

Anugerah Kagum  Berlina Tbk

Very good diversification

The 3 months correlation between Anugerah and Berlina is -0.29. Overlapping area represents the amount of risk that can be diversified away by holding Anugerah Kagum Karya and Berlina Tbk in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Berlina Tbk and Anugerah Kagum 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 Anugerah Kagum Karya are associated (or correlated) with Berlina Tbk. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Berlina Tbk has no effect on the direction of Anugerah Kagum i.e., Anugerah Kagum and Berlina Tbk go up and down completely randomly.

Pair Corralation between Anugerah Kagum and Berlina Tbk

Assuming the 90 days trading horizon Anugerah Kagum Karya is expected to generate 1.04 times more return on investment than Berlina Tbk. However, Anugerah Kagum is 1.04 times more volatile than Berlina Tbk. It trades about 0.02 of its potential returns per unit of risk. Berlina Tbk is currently generating about 0.0 per unit of risk. If you would invest  1,400  in Anugerah Kagum Karya on September 12, 2024 and sell it today you would earn a total of  0.00  from holding Anugerah Kagum Karya or generate 0.0% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Insignificant
Accuracy	98.41%
Values	Daily Returns

Anugerah Kagum Karya  vs.  Berlina Tbk

Anugerah Kagum Karya

Risk-Adjusted Performance

1 of 100

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Anugerah Kagum Karya are ranked lower than 1 (%) of all global equities and portfolios over the last 90 days. Despite quite persistent forward-looking signals, Anugerah Kagum is not utilizing all of its potentials. The latest stock price mess, may contribute to short-term losses for the institutional investors.

Berlina Tbk

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Berlina Tbk has generated negative risk-adjusted returns adding no value to investors with long positions. Despite quite persistent forward-looking signals, Berlina Tbk 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 Anugerah Kagum and Berlina Tbk

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

The idea behind Anugerah Kagum Karya and Berlina Tbk 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 Money Flow Index module to determine momentum by analyzing Money Flow Index and other technical indicators.