Correlation Between Intikeramik Alamasri and Berkah Beton

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

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

Diversification Opportunities for Intikeramik Alamasri and Berkah Beton

0.8

Correlation Coefficient

Intikeramik Alamasri  Berkah Beton

Very poor diversification

The 3 months correlation between Intikeramik and Berkah is 0.8. Overlapping area represents the amount of risk that can be diversified away by holding Intikeramik Alamasri Industri and Berkah Beton Sadaya in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Berkah Beton Sadaya and Intikeramik Alamasri 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 Intikeramik Alamasri Industri are associated (or correlated) with Berkah Beton. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Berkah Beton Sadaya has no effect on the direction of Intikeramik Alamasri i.e., Intikeramik Alamasri and Berkah Beton go up and down completely randomly.

Pair Corralation between Intikeramik Alamasri and Berkah Beton

Assuming the 90 days trading horizon Intikeramik Alamasri is expected to generate 1.83 times less return on investment than Berkah Beton. But when comparing it to its historical volatility, Intikeramik Alamasri Industri is 1.36 times less risky than Berkah Beton. It trades about 0.03 of its potential returns per unit of risk. Berkah Beton Sadaya is currently generating about 0.04 of returns per unit of risk over similar time horizon. If you would invest  500.00  in Berkah Beton Sadaya on September 3, 2024 and sell it today you would earn a total of  0.00  from holding Berkah Beton Sadaya or generate 0.0% return on investment over 90 days.

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

Intikeramik Alamasri Industri  vs.  Berkah Beton Sadaya

Intikeramik Alamasri

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Intikeramik Alamasri Industri 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 January 2025. The latest mess may also be a sign of long-standing up-swing for the company institutional investors.

Berkah Beton Sadaya

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Berkah Beton Sadaya 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 January 2025. The latest mess may also be a sign of long-standing up-swing for the company institutional investors.

Pair Trading with Intikeramik Alamasri and Berkah Beton

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

The idea behind Intikeramik Alamasri Industri and Berkah Beton Sadaya 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 File Import module to quickly import all of your third-party portfolios from your local drive in csv format.