Correlation Between TAMBANG BATUBARA-B- and AVIS BUDGET

Can any of the company-specific risk be diversified away by investing in both TAMBANG BATUBARA-B- and AVIS BUDGET 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 TAMBANG BATUBARA-B- and AVIS BUDGET into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between TAMBANG BATUBARA B and AVIS BUDGET GROUP, you can compare the effects of market volatilities on TAMBANG BATUBARA-B- and AVIS BUDGET 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 TAMBANG BATUBARA-B- with a short position of AVIS BUDGET. Check out your portfolio center. Please also check ongoing floating volatility patterns of TAMBANG BATUBARA-B- and AVIS BUDGET.

Diversification Opportunities for TAMBANG BATUBARA-B- and AVIS BUDGET

0.0

Correlation Coefficient

TAMBANG BATUBARA-B-  AVIS BUDGET

Pay attention - limited upside

The @@bw1eo months correlation between TAMBANG and AVIS is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding TAMBANG BATUBARA B and AVIS BUDGET GROUP in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on AVIS BUDGET GROUP and TAMBANG BATUBARA-B- 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 TAMBANG BATUBARA B are associated (or correlated) with AVIS BUDGET. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of AVIS BUDGET GROUP has no effect on the direction of TAMBANG BATUBARA-B- i.e., TAMBANG BATUBARA-B- and AVIS BUDGET go up and down completely randomly.

Pair Corralation between TAMBANG BATUBARA-B- and AVIS BUDGET

Assuming the 90 days trading horizon TAMBANG BATUBARA B is expected to under-perform the AVIS BUDGET. In addition to that, TAMBANG BATUBARA-B- is 21.9 times more volatile than AVIS BUDGET GROUP. It trades about -0.07 of its total potential returns per unit of risk. AVIS BUDGET GROUP is currently generating about -0.04 per unit of volatility. If you would invest  13,815  in AVIS BUDGET GROUP on February 3, 2024 and sell it today you would lose (4,545) from holding AVIS BUDGET GROUP or give up 32.9% of portfolio value over 90 days.

Time Period	@@bw1EO Months [change]
Direction	Flat
Strength	Insignificant
Accuracy	100.0%
Values	Daily Returns

TAMBANG BATUBARA B   vs.  AVIS BUDGET GROUP

TAMBANG BATUBARA-B-

Risk-Adjusted Performance

0 of 100

OK

Over the last 90 days TAMBANG BATUBARA B has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of comparatively stable basic indicators, TAMBANG BATUBARA-B- is not utilizing all of its potentials. The newest stock price uproar, may contribute to short-horizon losses for the private investors.

AVIS BUDGET GROUP

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days AVIS BUDGET GROUP has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of uncertain performance in the last few months, the Stock's basic indicators remain comparatively stable which may send shares a bit higher in June 2024. The newest uproar may also be a sign of mid-term up-swing for the firm private investors.

Pair Trading with TAMBANG BATUBARA-B- and AVIS BUDGET

The main advantage of trading using opposite TAMBANG BATUBARA-B- and AVIS BUDGET positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if TAMBANG BATUBARA-B- position performs unexpectedly, AVIS BUDGET 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 AVIS BUDGET will offset losses from the drop in AVIS BUDGET's long position.

The idea behind TAMBANG BATUBARA B and AVIS BUDGET GROUP 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 Share Portfolio module to track or share privately all of your investments from the convenience of any device.