Correlation Between Berkah Beton and Nusa Palapa

Can any of the company-specific risk be diversified away by investing in both Berkah Beton and Nusa Palapa 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 Nusa Palapa 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 Nusa Palapa Gemilang, you can compare the effects of market volatilities on Berkah Beton and Nusa Palapa 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 Nusa Palapa. Check out your portfolio center. Please also check ongoing floating volatility patterns of Berkah Beton and Nusa Palapa.

Diversification Opportunities for Berkah Beton and Nusa Palapa

0.05

Correlation Coefficient

Berkah Beton  Nusa Palapa

Significant diversification

The 3 months correlation between Berkah and Nusa is 0.05. Overlapping area represents the amount of risk that can be diversified away by holding Berkah Beton Sadaya and Nusa Palapa Gemilang in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Nusa Palapa Gemilang 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 Nusa Palapa. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Nusa Palapa Gemilang has no effect on the direction of Berkah Beton i.e., Berkah Beton and Nusa Palapa go up and down completely randomly.

Pair Corralation between Berkah Beton and Nusa Palapa

Assuming the 90 days trading horizon Berkah Beton Sadaya is expected to under-perform the Nusa Palapa. In addition to that, Berkah Beton is 1.86 times more volatile than Nusa Palapa Gemilang. It trades about -0.12 of its total potential returns per unit of risk. Nusa Palapa Gemilang is currently generating about -0.01 per unit of volatility. If you would invest  5,000  in Nusa Palapa Gemilang on September 1, 2024 and sell it today you would lose (1,700) from holding Nusa Palapa Gemilang or give up 34.0% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Insignificant
Accuracy	99.79%
Values	Daily Returns

Berkah Beton Sadaya  vs.  Nusa Palapa Gemilang

Berkah Beton Sadaya

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Berkah Beton Sadaya 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 December 2024. The latest mess may also be a sign of long-standing up-swing for the company institutional investors.

Nusa Palapa Gemilang

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Nusa Palapa Gemilang 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 December 2024. The latest mess may also be a sign of long-standing up-swing for the company institutional investors.

Pair Trading with Berkah Beton and Nusa Palapa

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

The idea behind Berkah Beton Sadaya and Nusa Palapa Gemilang 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 Sign In To Macroaxis module to sign in to explore Macroaxis' wealth optimization platform and fintech modules.