Correlation Between Agro Yasa and Karya Bersama

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

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

Diversification Opportunities for Agro Yasa and Karya Bersama

-0.59

Correlation Coefficient

Agro Yasa  Karya Bersama

Excellent diversification

The 3 months correlation between Agro and Karya is -0.59. Overlapping area represents the amount of risk that can be diversified away by holding Agro Yasa Lestari and Karya Bersama Anugerah in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Karya Bersama Anugerah and Agro Yasa 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 Agro Yasa Lestari are associated (or correlated) with Karya Bersama. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Karya Bersama Anugerah has no effect on the direction of Agro Yasa i.e., Agro Yasa and Karya Bersama go up and down completely randomly.

Pair Corralation between Agro Yasa and Karya Bersama

Assuming the 90 days trading horizon Agro Yasa Lestari is expected to under-perform the Karya Bersama. In addition to that, Agro Yasa is 2.11 times more volatile than Karya Bersama Anugerah. It trades about 0.0 of its total potential returns per unit of risk. Karya Bersama Anugerah is currently generating about 0.16 per unit of volatility. If you would invest  2,100  in Karya Bersama Anugerah on December 20, 2024 and sell it today you would earn a total of  800.00  from holding Karya Bersama Anugerah or generate 38.1% return on investment over 90 days.

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

Agro Yasa Lestari  vs.  Karya Bersama Anugerah

Agro Yasa Lestari

Risk-Adjusted Performance

Very Weak

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

Karya Bersama Anugerah

Risk-Adjusted Performance

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Karya Bersama Anugerah are ranked lower than 12 (%) of all global equities and portfolios over the last 90 days. Despite quite conflicting forward-looking signals, Karya Bersama disclosed solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Agro Yasa and Karya Bersama

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

The idea behind Agro Yasa Lestari and Karya Bersama Anugerah 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 Transaction History module to view history of all your transactions and understand their impact on performance.