Correlation Between Agro Yasa and Bima Sakti

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

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

Diversification Opportunities for Agro Yasa and Bima Sakti

0.0

Correlation Coefficient

Agro Yasa  Bima Sakti

Pay attention - limited upside

The 3 months correlation between Agro and Bima is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding Agro Yasa Lestari and Bima Sakti Pertiwi in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Bima Sakti Pertiwi and Agro Yasa 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 Agro Yasa Lestari are associated (or correlated) with Bima Sakti. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Bima Sakti Pertiwi has no effect on the direction of Agro Yasa i.e., Agro Yasa and Bima Sakti go up and down completely randomly.

Pair Corralation between Agro Yasa and Bima Sakti

If you would invest  5,000  in Agro Yasa Lestari on February 18, 2024 and sell it today you would earn a total of  0.00  from holding Agro Yasa Lestari or generate 0.0% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Flat
Strength	Insignificant
Accuracy	100.0%
Values	Daily Returns

Agro Yasa Lestari  vs.  Bima Sakti Pertiwi

Agro Yasa Lestari

Risk-Adjusted Performance

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Very Weak

Over the last 90 days Agro Yasa Lestari has generated negative risk-adjusted returns adding no value to investors with long positions. Despite quite persistent basic indicators, Agro Yasa is not utilizing all of its potentials. The latest stock price mess, may contribute to short-term losses for the institutional investors.

Bima Sakti Pertiwi

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Bima Sakti Pertiwi 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 basic indicators remain quite persistent which may send shares a bit higher in June 2024. The latest mess may also be a sign of long-standing up-swing for the company institutional investors.

Pair Trading with Agro Yasa and Bima Sakti

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

The idea behind Agro Yasa Lestari and Bima Sakti Pertiwi 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 Portfolio Anywhere module to track or share privately all of your investments from the convenience of any device.