Correlation Between PT Indonesia and Berkah Beton

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

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

Diversification Opportunities for PT Indonesia and Berkah Beton

-0.02

Correlation Coefficient

PT Indonesia  Berkah Beton

Good diversification

The 3 months correlation between IPCC and Berkah is -0.02. Overlapping area represents the amount of risk that can be diversified away by holding PT Indonesia Kendaraan 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 PT Indonesia 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 PT Indonesia Kendaraan 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 PT Indonesia i.e., PT Indonesia and Berkah Beton go up and down completely randomly.

Pair Corralation between PT Indonesia and Berkah Beton

Assuming the 90 days trading horizon PT Indonesia is expected to generate 1.77 times less return on investment than Berkah Beton. But when comparing it to its historical volatility, PT Indonesia Kendaraan is 5.26 times less risky than Berkah Beton. It trades about 0.11 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 December 30, 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 Against
Strength	Insignificant
Accuracy	100.0%
Values	Daily Returns

PT Indonesia Kendaraan  vs.  Berkah Beton Sadaya

PT Indonesia Kendaraan

Risk-Adjusted Performance

OK

Compared to the overall equity markets, risk-adjusted returns on investments in PT Indonesia Kendaraan are ranked lower than 8 (%) of all global equities and portfolios over the last 90 days. Despite quite conflicting forward-looking signals, PT Indonesia may actually be approaching a critical reversion point that can send shares even higher in April 2025.

Berkah Beton Sadaya

Risk-Adjusted Performance

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in Berkah Beton Sadaya are ranked lower than 3 (%) of all global equities and portfolios over the last 90 days. Despite quite conflicting forward-looking signals, Berkah Beton disclosed solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with PT Indonesia and Berkah Beton

The main advantage of trading using opposite PT Indonesia and Berkah Beton positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if PT Indonesia 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 PT Indonesia Kendaraan 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 Theme Ratings module to determine theme ratings based on digital equity recommendations. Macroaxis theme ratings are based on combination of fundamental analysis and risk-adjusted market performance.