Correlation Between Hartadinata Abadi and Pembangunan Graha

Can any of the company-specific risk be diversified away by investing in both Hartadinata Abadi and Pembangunan Graha 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 Hartadinata Abadi and Pembangunan Graha into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Hartadinata Abadi Tbk and Pembangunan Graha Lestari, you can compare the effects of market volatilities on Hartadinata Abadi and Pembangunan Graha 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 Hartadinata Abadi with a short position of Pembangunan Graha. Check out your portfolio center. Please also check ongoing floating volatility patterns of Hartadinata Abadi and Pembangunan Graha.

Diversification Opportunities for Hartadinata Abadi and Pembangunan Graha

-0.66

Correlation Coefficient

Hartadinata Abadi  Pembangunan Graha

Excellent diversification

The 3 months correlation between Hartadinata and Pembangunan is -0.66. Overlapping area represents the amount of risk that can be diversified away by holding Hartadinata Abadi Tbk and Pembangunan Graha Lestari in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Pembangunan Graha Lestari and Hartadinata Abadi 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 Hartadinata Abadi Tbk are associated (or correlated) with Pembangunan Graha. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Pembangunan Graha Lestari has no effect on the direction of Hartadinata Abadi i.e., Hartadinata Abadi and Pembangunan Graha go up and down completely randomly.

Pair Corralation between Hartadinata Abadi and Pembangunan Graha

Assuming the 90 days trading horizon Hartadinata Abadi Tbk is expected to generate 1.18 times more return on investment than Pembangunan Graha. However, Hartadinata Abadi is 1.18 times more volatile than Pembangunan Graha Lestari. It trades about 0.15 of its potential returns per unit of risk. Pembangunan Graha Lestari is currently generating about -0.13 per unit of risk. If you would invest  35,400  in Hartadinata Abadi Tbk on December 29, 2024 and sell it today you would earn a total of  16,600  from holding Hartadinata Abadi Tbk or generate 46.89% return on investment over 90 days.

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

Hartadinata Abadi Tbk  vs.  Pembangunan Graha Lestari

Hartadinata Abadi Tbk

Risk-Adjusted Performance

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Hartadinata Abadi Tbk are ranked lower than 11 (%) of all global equities and portfolios over the last 90 days. Despite quite conflicting forward-looking signals, Hartadinata Abadi disclosed solid returns over the last few months and may actually be approaching a breakup point.

Pembangunan Graha Lestari

Risk-Adjusted Performance

Very Weak

Over the last 90 days Pembangunan Graha Lestari 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 April 2025. The latest mess may also be a sign of long-standing up-swing for the company institutional investors.

Pair Trading with Hartadinata Abadi and Pembangunan Graha

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

The idea behind Hartadinata Abadi Tbk and Pembangunan Graha Lestari 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 Bond Analysis module to evaluate and analyze corporate bonds as a potential investment for your portfolios..