Correlation Between PT Pelayaran and Asuransi Bina

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

By analyzing existing cross correlation between PT Pelayaran Tamarin and Asuransi Bina Dana, you can compare the effects of market volatilities on PT Pelayaran and Asuransi Bina 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 Pelayaran with a short position of Asuransi Bina. Check out your portfolio center. Please also check ongoing floating volatility patterns of PT Pelayaran and Asuransi Bina.

Diversification Opportunities for PT Pelayaran and Asuransi Bina

0.68

Correlation Coefficient

PT Pelayaran  Asuransi Bina

Poor diversification

The 3 months correlation between TAMU and Asuransi is 0.68. Overlapping area represents the amount of risk that can be diversified away by holding PT Pelayaran Tamarin and Asuransi Bina Dana in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Asuransi Bina Dana and PT Pelayaran 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 Pelayaran Tamarin are associated (or correlated) with Asuransi Bina. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Asuransi Bina Dana has no effect on the direction of PT Pelayaran i.e., PT Pelayaran and Asuransi Bina go up and down completely randomly.

Pair Corralation between PT Pelayaran and Asuransi Bina

Assuming the 90 days trading horizon PT Pelayaran Tamarin is expected to under-perform the Asuransi Bina. In addition to that, PT Pelayaran is 4.41 times more volatile than Asuransi Bina Dana. It trades about -0.18 of its total potential returns per unit of risk. Asuransi Bina Dana is currently generating about -0.12 per unit of volatility. If you would invest  450,000  in Asuransi Bina Dana on September 2, 2024 and sell it today you would lose (44,000) from holding Asuransi Bina Dana or give up 9.78% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Significant
Accuracy	98.44%
Values	Daily Returns

PT Pelayaran Tamarin  vs.  Asuransi Bina Dana

PT Pelayaran Tamarin

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days PT Pelayaran Tamarin 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.

Asuransi Bina Dana

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Asuransi Bina Dana has generated negative risk-adjusted returns adding no value to investors with long positions. Despite latest conflicting performance, the Stock's forward-looking signals remain persistent and the latest mess on Wall Street may also be a sign of long-standing gains for the company institutional investors.

Pair Trading with PT Pelayaran and Asuransi Bina

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

The idea behind PT Pelayaran Tamarin and Asuransi Bina Dana 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 Premium Stories module to follow Macroaxis premium stories from verified contributors across different equity types, categories and coverage scope.