Correlation Between Berkah Beton and PT Harapan

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

By analyzing existing cross correlation between Berkah Beton Sadaya and PT Harapan Duta, you can compare the effects of market volatilities on Berkah Beton and PT Harapan 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 Berkah Beton with a short position of PT Harapan. Check out your portfolio center. Please also check ongoing floating volatility patterns of Berkah Beton and PT Harapan.

Diversification Opportunities for Berkah Beton and PT Harapan

-0.31

Correlation Coefficient

Berkah Beton  PT Harapan

Very good diversification

The 3 months correlation between Berkah and HOPE is -0.31. Overlapping area represents the amount of risk that can be diversified away by holding Berkah Beton Sadaya and PT Harapan Duta in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on PT Harapan Duta and Berkah Beton 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 Berkah Beton Sadaya are associated (or correlated) with PT Harapan. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of PT Harapan Duta has no effect on the direction of Berkah Beton i.e., Berkah Beton and PT Harapan go up and down completely randomly.

Pair Corralation between Berkah Beton and PT Harapan

Assuming the 90 days trading horizon Berkah Beton Sadaya is expected to generate 2.63 times more return on investment than PT Harapan. However, Berkah Beton is 2.63 times more volatile than PT Harapan Duta. It trades about 0.08 of its potential returns per unit of risk. PT Harapan Duta is currently generating about -0.12 per unit of risk. If you would invest  500.00  in Berkah Beton Sadaya on October 25, 2024 and sell it today you would earn a total of  100.00  from holding Berkah Beton Sadaya or generate 20.0% return on investment over 90 days.

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

Berkah Beton Sadaya  vs.  PT Harapan Duta

Berkah Beton Sadaya

Risk-Adjusted Performance

6 of 100

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in Berkah Beton Sadaya are ranked lower than 6 (%) of all global equities and portfolios over the last 90 days. Despite quite weak forward-looking signals, Berkah Beton disclosed solid returns over the last few months and may actually be approaching a breakup point.

PT Harapan Duta

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days PT Harapan Duta 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 February 2025. The latest mess may also be a sign of long-standing up-swing for the company institutional investors.

Pair Trading with Berkah Beton and PT Harapan

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

The idea behind Berkah Beton Sadaya and PT Harapan Duta 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.

Check out your portfolio center.

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 Content Syndication module to quickly integrate customizable finance content to your own investment portal.