Correlation Between PT Berkah and Anhui Conch

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

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

Diversification Opportunities for PT Berkah and Anhui Conch

0.0

Correlation Coefficient

PT Berkah  Anhui Conch

Pay attention - limited upside

The 3 months correlation between BHBSY and Anhui is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding PT Berkah Beton and Anhui Conch Cement in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Anhui Conch Cement and PT Berkah 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 PT Berkah Beton are associated (or correlated) with Anhui Conch. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Anhui Conch Cement has no effect on the direction of PT Berkah i.e., PT Berkah and Anhui Conch go up and down completely randomly.

Pair Corralation between PT Berkah and Anhui Conch

If you would invest  234.00  in Anhui Conch Cement on September 13, 2024 and sell it today you would earn a total of  53.00  from holding Anhui Conch Cement or generate 22.65% return on investment over 90 days.

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

PT Berkah Beton  vs.  Anhui Conch Cement

PT Berkah Beton

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days PT Berkah Beton has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of fairly strong basic indicators, PT Berkah is not utilizing all of its potentials. The recent stock price disturbance, may contribute to short-term losses for the investors.

Anhui Conch Cement

Risk-Adjusted Performance

6 of 100

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in Anhui Conch Cement are ranked lower than 6 (%) of all global equities and portfolios over the last 90 days. Despite nearly fragile technical indicators, Anhui Conch reported solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with PT Berkah and Anhui Conch

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

The idea behind PT Berkah Beton and Anhui Conch Cement 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 Odds Of Bankruptcy module to get analysis of equity chance of financial distress in the next 2 years.