Correlation Between PT Hatten and Trimegah Karya

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

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

Diversification Opportunities for PT Hatten and Trimegah Karya

-0.52

Correlation Coefficient

PT Hatten  Trimegah Karya

Excellent diversification

The 3 months correlation between WINE and Trimegah is -0.52. Overlapping area represents the amount of risk that can be diversified away by holding PT Hatten Bali and Trimegah Karya Pratama in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Trimegah Karya Pratama and PT Hatten 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 Hatten Bali are associated (or correlated) with Trimegah Karya. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Trimegah Karya Pratama has no effect on the direction of PT Hatten i.e., PT Hatten and Trimegah Karya go up and down completely randomly.

Pair Corralation between PT Hatten and Trimegah Karya

Assuming the 90 days trading horizon PT Hatten Bali is expected to generate 1.25 times more return on investment than Trimegah Karya. However, PT Hatten is 1.25 times more volatile than Trimegah Karya Pratama. It trades about 0.05 of its potential returns per unit of risk. Trimegah Karya Pratama is currently generating about -0.01 per unit of risk. If you would invest  17,213  in PT Hatten Bali on September 4, 2024 and sell it today you would earn a total of  17,787  from holding PT Hatten Bali or generate 103.33% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Very Weak
Accuracy	96.19%
Values	Daily Returns

PT Hatten Bali  vs.  Trimegah Karya Pratama

PT Hatten Bali

Risk-Adjusted Performance

11 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in PT Hatten Bali are ranked lower than 11 (%) of all global equities and portfolios over the last 90 days. Despite quite conflicting forward-looking signals, PT Hatten disclosed solid returns over the last few months and may actually be approaching a breakup point.

Trimegah Karya Pratama

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Trimegah Karya Pratama 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 Hatten and Trimegah Karya

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

The idea behind PT Hatten Bali and Trimegah Karya Pratama 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 Aroon Oscillator module to analyze current equity momentum using Aroon Oscillator and other momentum ratios.