Correlation Between Bekasi Fajar and Tera Data

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

By analyzing existing cross correlation between Bekasi Fajar Industrial and Tera Data Indonusa, you can compare the effects of market volatilities on Bekasi Fajar and Tera Data 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 Bekasi Fajar with a short position of Tera Data. Check out your portfolio center. Please also check ongoing floating volatility patterns of Bekasi Fajar and Tera Data.

Diversification Opportunities for Bekasi Fajar and Tera Data

-0.16

Correlation Coefficient

Bekasi Fajar  Tera Data

Good diversification

The 3 months correlation between Bekasi and Tera is -0.16. Overlapping area represents the amount of risk that can be diversified away by holding Bekasi Fajar Industrial and Tera Data Indonusa in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Tera Data Indonusa and Bekasi Fajar 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 Bekasi Fajar Industrial are associated (or correlated) with Tera Data. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Tera Data Indonusa has no effect on the direction of Bekasi Fajar i.e., Bekasi Fajar and Tera Data go up and down completely randomly.

Pair Corralation between Bekasi Fajar and Tera Data

Assuming the 90 days trading horizon Bekasi Fajar Industrial is expected to under-perform the Tera Data. But the stock apears to be less risky and, when comparing its historical volatility, Bekasi Fajar Industrial is 1.03 times less risky than Tera Data. The stock trades about -0.15 of its potential returns per unit of risk. The Tera Data Indonusa is currently generating about 0.02 of returns per unit of risk over similar time horizon. If you would invest  11,716  in Tera Data Indonusa on October 26, 2024 and sell it today you would earn a total of  184.00  from holding Tera Data Indonusa or generate 1.57% return on investment over 90 days.

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

Bekasi Fajar Industrial  vs.  Tera Data Indonusa

Bekasi Fajar Industrial

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Bekasi Fajar Industrial 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.

Tera Data Indonusa

Risk-Adjusted Performance

1 of 100

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Tera Data Indonusa are ranked lower than 1 (%) of all global equities and portfolios over the last 90 days. Despite quite persistent forward-looking signals, Tera Data 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 Bekasi Fajar and Tera Data

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

The idea behind Bekasi Fajar Industrial and Tera Data Indonusa 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 Cryptocurrency Center module to build and monitor diversified portfolio of extremely risky digital assets and cryptocurrency.