Correlation Between Bhuwanatala Indah and Bintang Mitra

Can any of the company-specific risk be diversified away by investing in both Bhuwanatala Indah and Bintang Mitra 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 Bhuwanatala Indah and Bintang Mitra into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Bhuwanatala Indah Permai and Bintang Mitra Semestaraya, you can compare the effects of market volatilities on Bhuwanatala Indah and Bintang Mitra 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 Bhuwanatala Indah with a short position of Bintang Mitra. Check out your portfolio center. Please also check ongoing floating volatility patterns of Bhuwanatala Indah and Bintang Mitra.

Diversification Opportunities for Bhuwanatala Indah and Bintang Mitra

-0.02

Correlation Coefficient

Bhuwanatala Indah  Bintang Mitra

Good diversification

The 3 months correlation between Bhuwanatala and Bintang is -0.02. Overlapping area represents the amount of risk that can be diversified away by holding Bhuwanatala Indah Permai and Bintang Mitra Semestaraya in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Bintang Mitra Semestaraya and Bhuwanatala Indah 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 Bhuwanatala Indah Permai are associated (or correlated) with Bintang Mitra. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Bintang Mitra Semestaraya has no effect on the direction of Bhuwanatala Indah i.e., Bhuwanatala Indah and Bintang Mitra go up and down completely randomly.

Pair Corralation between Bhuwanatala Indah and Bintang Mitra

Assuming the 90 days trading horizon Bhuwanatala Indah Permai is expected to generate 3.85 times more return on investment than Bintang Mitra. However, Bhuwanatala Indah is 3.85 times more volatile than Bintang Mitra Semestaraya. It trades about 0.02 of its potential returns per unit of risk. Bintang Mitra Semestaraya is currently generating about -0.1 per unit of risk. If you would invest  3,200  in Bhuwanatala Indah Permai on December 2, 2024 and sell it today you would earn a total of  0.00  from holding Bhuwanatala Indah Permai or generate 0.0% return on investment over 90 days.

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

Bhuwanatala Indah Permai  vs.  Bintang Mitra Semestaraya

Bhuwanatala Indah Permai

Risk-Adjusted Performance

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Bhuwanatala Indah Permai are ranked lower than 1 (%) of all global equities and portfolios over the last 90 days. Despite quite persistent forward-looking signals, Bhuwanatala Indah is not utilizing all of its potentials. The latest stock price mess, may contribute to short-term losses for the institutional investors.

Bintang Mitra Semestaraya

Risk-Adjusted Performance

Very Weak

Over the last 90 days Bintang Mitra Semestaraya has generated negative risk-adjusted returns adding no value to investors with long positions. Despite latest conflicting performance, the Stock's forward-looking signals remain persistent and the latest mess on Wall Street may also be a sign of long-standing gains for the company institutional investors.

Pair Trading with Bhuwanatala Indah and Bintang Mitra

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

The idea behind Bhuwanatala Indah Permai and Bintang Mitra Semestaraya 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 Portfolio Anywhere module to track or share privately all of your investments from the convenience of any device.