Correlation Between Intikeramik Alamasri and Betonjaya Manunggal

Can any of the company-specific risk be diversified away by investing in both Intikeramik Alamasri and Betonjaya Manunggal 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 Betonjaya Manunggal 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 Betonjaya Manunggal Tbk, you can compare the effects of market volatilities on Intikeramik Alamasri and Betonjaya Manunggal 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 Betonjaya Manunggal. Check out your portfolio center. Please also check ongoing floating volatility patterns of Intikeramik Alamasri and Betonjaya Manunggal.

Diversification Opportunities for Intikeramik Alamasri and Betonjaya Manunggal

0.51

Correlation Coefficient

Intikeramik Alamasri  Betonjaya Manunggal

Very weak diversification

The 3 months correlation between Intikeramik and Betonjaya is 0.51. Overlapping area represents the amount of risk that can be diversified away by holding Intikeramik Alamasri Industri and Betonjaya Manunggal Tbk in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Betonjaya Manunggal Tbk 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 Betonjaya Manunggal. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Betonjaya Manunggal Tbk has no effect on the direction of Intikeramik Alamasri i.e., Intikeramik Alamasri and Betonjaya Manunggal go up and down completely randomly.

Pair Corralation between Intikeramik Alamasri and Betonjaya Manunggal

Assuming the 90 days trading horizon Intikeramik Alamasri Industri is expected to under-perform the Betonjaya Manunggal. In addition to that, Intikeramik Alamasri is 1.6 times more volatile than Betonjaya Manunggal Tbk. It trades about -0.05 of its total potential returns per unit of risk. Betonjaya Manunggal Tbk is currently generating about 0.0 per unit of volatility. If you would invest  43,822  in Betonjaya Manunggal Tbk on September 13, 2024 and sell it today you would lose (1,822) from holding Betonjaya Manunggal Tbk or give up 4.16% of portfolio value over 90 days.

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

Intikeramik Alamasri Industri  vs.  Betonjaya Manunggal Tbk

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.

Betonjaya Manunggal Tbk

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Betonjaya Manunggal Tbk has generated negative risk-adjusted returns adding no value to investors with long positions. Despite quite persistent forward-looking signals, Betonjaya Manunggal 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 Intikeramik Alamasri and Betonjaya Manunggal

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

The idea behind Intikeramik Alamasri Industri and Betonjaya Manunggal Tbk 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 Money Managers module to screen money managers from public funds and ETFs managed around the world.