Correlation Between Amazon and Asuransi Bina

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

By analyzing existing cross correlation between Amazon Inc and Asuransi Bina Dana, you can compare the effects of market volatilities on Amazon and Asuransi Bina 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 Amazon with a short position of Asuransi Bina. Check out your portfolio center. Please also check ongoing floating volatility patterns of Amazon and Asuransi Bina.

Diversification Opportunities for Amazon and Asuransi Bina

-0.34

Correlation Coefficient

Amazon  Asuransi Bina

Very good diversification

The 3 months correlation between Amazon and Asuransi is -0.34. Overlapping area represents the amount of risk that can be diversified away by holding Amazon Inc and Asuransi Bina Dana in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Asuransi Bina Dana and Amazon 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 Amazon Inc are associated (or correlated) with Asuransi Bina. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Asuransi Bina Dana has no effect on the direction of Amazon i.e., Amazon and Asuransi Bina go up and down completely randomly.

Pair Corralation between Amazon and Asuransi Bina

Given the investment horizon of 90 days Amazon Inc is expected to generate 2.12 times more return on investment than Asuransi Bina. However, Amazon is 2.12 times more volatile than Asuransi Bina Dana. It trades about 0.18 of its potential returns per unit of risk. Asuransi Bina Dana is currently generating about -0.12 per unit of risk. If you would invest  18,700  in Amazon Inc on September 12, 2024 and sell it today you would earn a total of  3,804  from holding Amazon Inc or generate 20.34% return on investment over 90 days.

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

Amazon Inc  vs.  Asuransi Bina Dana

Amazon Inc

Risk-Adjusted Performance

14 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Amazon Inc are ranked lower than 14 (%) of all global equities and portfolios over the last 90 days. In spite of very unsteady basic indicators, Amazon displayed solid returns over the last few months and may actually be approaching a breakup point.

Asuransi Bina Dana

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Asuransi Bina Dana has generated negative risk-adjusted returns adding no value to investors with long positions. Despite quite persistent forward-looking signals, Asuransi Bina 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 Amazon and Asuransi Bina

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

The idea behind Amazon Inc and Asuransi Bina Dana 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 Investing Opportunities module to build portfolios using our predefined set of ideas and optimize them against your investing preferences.