Correlation Between Trimegah Karya and PT Hatten

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

By analyzing existing cross correlation between Trimegah Karya Pratama and PT Hatten Bali, you can compare the effects of market volatilities on Trimegah Karya and PT Hatten 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 Trimegah Karya with a short position of PT Hatten. Check out your portfolio center. Please also check ongoing floating volatility patterns of Trimegah Karya and PT Hatten.

Diversification Opportunities for Trimegah Karya and PT Hatten

0.26

Correlation Coefficient

Trimegah Karya  PT Hatten

Modest diversification

The 3 months correlation between Trimegah and WINE is 0.26. Overlapping area represents the amount of risk that can be diversified away by holding Trimegah Karya Pratama and PT Hatten Bali in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on PT Hatten Bali and Trimegah Karya 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 Trimegah Karya Pratama are associated (or correlated) with PT Hatten. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of PT Hatten Bali has no effect on the direction of Trimegah Karya i.e., Trimegah Karya and PT Hatten go up and down completely randomly.

Pair Corralation between Trimegah Karya and PT Hatten

Assuming the 90 days trading horizon Trimegah Karya Pratama is expected to generate 1.4 times more return on investment than PT Hatten. However, Trimegah Karya is 1.4 times more volatile than PT Hatten Bali. It trades about 0.06 of its potential returns per unit of risk. PT Hatten Bali is currently generating about -0.05 per unit of risk. If you would invest  5,900  in Trimegah Karya Pratama on December 24, 2024 and sell it today you would earn a total of  800.00  from holding Trimegah Karya Pratama or generate 13.56% return on investment over 90 days.

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

Trimegah Karya Pratama  vs.  PT Hatten Bali

Trimegah Karya Pratama

Risk-Adjusted Performance

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in Trimegah Karya Pratama are ranked lower than 4 (%) of all global equities and portfolios over the last 90 days. Despite quite conflicting forward-looking signals, Trimegah Karya disclosed solid returns over the last few months and may actually be approaching a breakup point.

PT Hatten Bali

Risk-Adjusted Performance

Very Weak

Over the last 90 days PT Hatten Bali 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 April 2025. The latest mess may also be a sign of long-standing up-swing for the company institutional investors.

Pair Trading with Trimegah Karya and PT Hatten

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

The idea behind Trimegah Karya Pratama and PT Hatten Bali 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 Insider Screener module to find insiders across different sectors to evaluate their impact on performance.