Correlation Between Bima Sakti and Puri Global

Can any of the company-specific risk be diversified away by investing in both Bima Sakti and Puri Global 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 Bima Sakti and Puri Global into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Bima Sakti Pertiwi and Puri Global Sukses, you can compare the effects of market volatilities on Bima Sakti and Puri Global 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 Bima Sakti with a short position of Puri Global. Check out your portfolio center. Please also check ongoing floating volatility patterns of Bima Sakti and Puri Global.

Diversification Opportunities for Bima Sakti and Puri Global

-0.29

Correlation Coefficient

Bima Sakti  Puri Global

Very good diversification

The 3 months correlation between Bima and Puri is -0.29. Overlapping area represents the amount of risk that can be diversified away by holding Bima Sakti Pertiwi and Puri Global Sukses in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Puri Global Sukses and Bima Sakti 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 Bima Sakti Pertiwi are associated (or correlated) with Puri Global. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Puri Global Sukses has no effect on the direction of Bima Sakti i.e., Bima Sakti and Puri Global go up and down completely randomly.

Pair Corralation between Bima Sakti and Puri Global

Assuming the 90 days trading horizon Bima Sakti Pertiwi is expected to generate 0.33 times more return on investment than Puri Global. However, Bima Sakti Pertiwi is 3.02 times less risky than Puri Global. It trades about 0.22 of its potential returns per unit of risk. Puri Global Sukses is currently generating about 0.02 per unit of risk. If you would invest  5,100  in Bima Sakti Pertiwi on December 20, 2024 and sell it today you would earn a total of  1,600  from holding Bima Sakti Pertiwi or generate 31.37% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Insignificant
Accuracy	98.28%
Values	Daily Returns

Bima Sakti Pertiwi  vs.  Puri Global Sukses

Bima Sakti Pertiwi

Risk-Adjusted Performance

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Bima Sakti Pertiwi are ranked lower than 17 (%) of all global equities and portfolios over the last 90 days. Despite quite conflicting forward-looking signals, Bima Sakti disclosed solid returns over the last few months and may actually be approaching a breakup point.

Puri Global Sukses

Risk-Adjusted Performance

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Puri Global Sukses are ranked lower than 1 (%) of all global equities and portfolios over the last 90 days. Despite quite conflicting forward-looking signals, Puri Global may actually be approaching a critical reversion point that can send shares even higher in April 2025.

Pair Trading with Bima Sakti and Puri Global

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

The idea behind Bima Sakti Pertiwi and Puri Global Sukses 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.

Check out your portfolio center.

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 Competition Analyzer module to analyze and compare many basic indicators for a group of related or unrelated entities.