Correlation Between Bekasi Fajar and Puradelta Lestari

Can any of the company-specific risk be diversified away by investing in both Bekasi Fajar and Puradelta Lestari 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 Bekasi Fajar and Puradelta Lestari into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Bekasi Fajar Industrial and Puradelta Lestari PT, you can compare the effects of market volatilities on Bekasi Fajar and Puradelta Lestari 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 Bekasi Fajar with a short position of Puradelta Lestari. Check out your portfolio center. Please also check ongoing floating volatility patterns of Bekasi Fajar and Puradelta Lestari.

Diversification Opportunities for Bekasi Fajar and Puradelta Lestari

0.77

Correlation Coefficient

Bekasi Fajar  Puradelta Lestari

Poor diversification

The 3 months correlation between Bekasi and Puradelta is 0.77. Overlapping area represents the amount of risk that can be diversified away by holding Bekasi Fajar Industrial and Puradelta Lestari PT in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Puradelta Lestari and Bekasi Fajar 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 Bekasi Fajar Industrial are associated (or correlated) with Puradelta Lestari. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Puradelta Lestari has no effect on the direction of Bekasi Fajar i.e., Bekasi Fajar and Puradelta Lestari go up and down completely randomly.

Pair Corralation between Bekasi Fajar and Puradelta Lestari

Assuming the 90 days trading horizon Bekasi Fajar Industrial is expected to under-perform the Puradelta Lestari. In addition to that, Bekasi Fajar is 2.07 times more volatile than Puradelta Lestari PT. It trades about -0.07 of its total potential returns per unit of risk. Puradelta Lestari PT is currently generating about 0.01 per unit of volatility. If you would invest  15,635  in Puradelta Lestari PT on August 28, 2024 and sell it today you would earn a total of  365.00  from holding Puradelta Lestari PT or generate 2.33% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Significant
Accuracy	99.71%
Values	Daily Returns

Bekasi Fajar Industrial  vs.  Puradelta Lestari PT

Bekasi Fajar Industrial

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Bekasi Fajar Industrial 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 December 2024. The latest mess may also be a sign of long-standing up-swing for the company institutional investors.

Puradelta Lestari

Risk-Adjusted Performance

0 of 100

Very Weak

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

Pair Trading with Bekasi Fajar and Puradelta Lestari

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

The idea behind Bekasi Fajar Industrial and Puradelta Lestari PT 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 Companies Directory module to evaluate performance of over 100,000 Stocks, Funds, and ETFs against different fundamentals.