Correlation Between Habco Trans and Bangun Karya

Can any of the company-specific risk be diversified away by investing in both Habco Trans and Bangun Karya 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 Habco Trans and Bangun Karya into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Habco Trans Maritima and Bangun Karya Perkasa, you can compare the effects of market volatilities on Habco Trans and Bangun Karya 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 Habco Trans with a short position of Bangun Karya. Check out your portfolio center. Please also check ongoing floating volatility patterns of Habco Trans and Bangun Karya.

Diversification Opportunities for Habco Trans and Bangun Karya

-0.02

Correlation Coefficient

Habco Trans  Bangun Karya

Good diversification

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

Pair Corralation between Habco Trans and Bangun Karya

Assuming the 90 days trading horizon Habco Trans Maritima is expected to generate 1.51 times more return on investment than Bangun Karya. However, Habco Trans is 1.51 times more volatile than Bangun Karya Perkasa. It trades about 0.01 of its potential returns per unit of risk. Bangun Karya Perkasa is currently generating about 0.01 per unit of risk. If you would invest  27,600  in Habco Trans Maritima on October 21, 2024 and sell it today you would lose (400.00) from holding Habco Trans Maritima or give up 1.45% of portfolio value over 90 days.

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

Habco Trans Maritima  vs.  Bangun Karya Perkasa

Habco Trans Maritima

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Habco Trans Maritima has generated negative risk-adjusted returns adding no value to investors with long positions. Despite quite persistent forward-looking signals, Habco Trans is not utilizing all of its potentials. The latest stock price mess, may contribute to short-term losses for the institutional investors.

Bangun Karya Perkasa

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Bangun Karya Perkasa has generated negative risk-adjusted returns adding no value to investors with long positions. Despite quite persistent forward-looking signals, Bangun Karya 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 Habco Trans and Bangun Karya

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

The idea behind Habco Trans Maritima and Bangun Karya Perkasa 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.