Correlation Between PT Berkah and CRH PLC

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

Diversification Opportunities for PT Berkah and CRH PLC

0.0

Correlation Coefficient

PT Berkah  CRH PLC

Pay attention - limited upside

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

Pair Corralation between PT Berkah and CRH PLC

If you would invest  8,917  in CRH PLC ADR on September 14, 2024 and sell it today you would earn a total of  938.00  from holding CRH PLC ADR or generate 10.52% 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.  CRH PLC ADR

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.

CRH PLC ADR

Risk-Adjusted Performance

11 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in CRH PLC ADR are ranked lower than 11 (%) of all global equities and portfolios over the last 90 days. Despite fairly unfluctuating basic indicators, CRH PLC may actually be approaching a critical reversion point that can send shares even higher in January 2025.

Pair Trading with PT Berkah and CRH PLC

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

The idea behind PT Berkah Beton and CRH PLC ADR 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 ETF Categories module to list of ETF categories grouped based on various criteria, such as the investment strategy or type of investments.