Correlation Between Akr Corporindo and Bakrie Sumatera
Can any of the company-specific risk be diversified away by investing in both Akr Corporindo and Bakrie Sumatera 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 Akr Corporindo and Bakrie Sumatera into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Akr Corporindo Tbk and Bakrie Sumatera Plantations, you can compare the effects of market volatilities on Akr Corporindo and Bakrie Sumatera 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 Akr Corporindo with a short position of Bakrie Sumatera. Check out your portfolio center. Please also check ongoing floating volatility patterns of Akr Corporindo and Bakrie Sumatera.
Diversification Opportunities for Akr Corporindo and Bakrie Sumatera
-0.8 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Akr and Bakrie is -0.8. Overlapping area represents the amount of risk that can be diversified away by holding Akr Corporindo Tbk and Bakrie Sumatera Plantations in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Bakrie Sumatera Plan and Akr Corporindo 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 Akr Corporindo Tbk are associated (or correlated) with Bakrie Sumatera. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Bakrie Sumatera Plan has no effect on the direction of Akr Corporindo i.e., Akr Corporindo and Bakrie Sumatera go up and down completely randomly.
Pair Corralation between Akr Corporindo and Bakrie Sumatera
Assuming the 90 days trading horizon Akr Corporindo Tbk is expected to under-perform the Bakrie Sumatera. But the stock apears to be less risky and, when comparing its historical volatility, Akr Corporindo Tbk is 1.13 times less risky than Bakrie Sumatera. The stock trades about -0.15 of its potential returns per unit of risk. The Bakrie Sumatera Plantations is currently generating about 0.16 of returns per unit of risk over similar time horizon. If you would invest 11,100 in Bakrie Sumatera Plantations on August 30, 2024 and sell it today you would earn a total of 1,100 from holding Bakrie Sumatera Plantations or generate 9.91% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Akr Corporindo Tbk vs. Bakrie Sumatera Plantations
Performance |
| Timeline |
| Akr Corporindo Tbk |
| Bakrie Sumatera Plan |
Akr Corporindo and Bakrie Sumatera Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Akr Corporindo and Bakrie Sumatera
The main advantage of trading using opposite Akr Corporindo and Bakrie Sumatera positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Akr Corporindo position performs unexpectedly, Bakrie Sumatera 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 Bakrie Sumatera will offset losses from the drop in Bakrie Sumatera's long position.| Akr Corporindo vs. Charoen Pokphand Indonesia | Akr Corporindo vs. Indocement Tunggal Prakarsa | Akr Corporindo vs. Bumi Serpong Damai | Akr Corporindo vs. Jasa Marga Tbk |
| Bakrie Sumatera vs. Bakrieland Development Tbk | Bakrie Sumatera vs. Bakrie Brothers Tbk | Bakrie Sumatera vs. Energi Mega Persada | Bakrie Sumatera vs. Sampoerna Agro Tbk |
Check out your portfolio center.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 Optimization module to compute new portfolio that will generate highest expected return given your specified tolerance for risk.
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