Correlation Between Asuransi Jasa and Asuransi Bintang

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

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

Diversification Opportunities for Asuransi Jasa and Asuransi Bintang

0.4

Correlation Coefficient

Asuransi Jasa  Asuransi Bintang

Very weak diversification

The 3 months correlation between Asuransi and Asuransi is 0.4. Overlapping area represents the amount of risk that can be diversified away by holding Asuransi Jasa Tania and Asuransi Bintang Tbk in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Asuransi Bintang Tbk and Asuransi Jasa 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 Asuransi Jasa Tania are associated (or correlated) with Asuransi Bintang. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Asuransi Bintang Tbk has no effect on the direction of Asuransi Jasa i.e., Asuransi Jasa and Asuransi Bintang go up and down completely randomly.

Pair Corralation between Asuransi Jasa and Asuransi Bintang

Assuming the 90 days trading horizon Asuransi Jasa Tania is expected to generate 0.41 times more return on investment than Asuransi Bintang. However, Asuransi Jasa Tania is 2.44 times less risky than Asuransi Bintang. It trades about -0.03 of its potential returns per unit of risk. Asuransi Bintang Tbk is currently generating about -0.12 per unit of risk. If you would invest  11,400  in Asuransi Jasa Tania on November 28, 2024 and sell it today you would lose (500.00) from holding Asuransi Jasa Tania or give up 4.39% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Weak
Accuracy	98.28%
Values	Daily Returns

Asuransi Jasa Tania  vs.  Asuransi Bintang Tbk

Asuransi Jasa Tania

Risk-Adjusted Performance

Very Weak

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

Asuransi Bintang Tbk

Risk-Adjusted Performance

Very Weak

Over the last 90 days Asuransi Bintang Tbk 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 March 2025. The latest mess may also be a sign of long-standing up-swing for the company institutional investors.

Pair Trading with Asuransi Jasa and Asuransi Bintang

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

The idea behind Asuransi Jasa Tania and Asuransi Bintang 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 Portfolio File Import module to quickly import all of your third-party portfolios from your local drive in csv format.