Correlation Between Alakasa Industrindo and Bayu Buana
Can any of the company-specific risk be diversified away by investing in both Alakasa Industrindo and Bayu Buana 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 Alakasa Industrindo and Bayu Buana into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Alakasa Industrindo Tbk and Bayu Buana Tbk, you can compare the effects of market volatilities on Alakasa Industrindo and Bayu Buana 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 Alakasa Industrindo with a short position of Bayu Buana. Check out your portfolio center. Please also check ongoing floating volatility patterns of Alakasa Industrindo and Bayu Buana.
Diversification Opportunities for Alakasa Industrindo and Bayu Buana
0.34 | Correlation Coefficient |
Weak diversification
The 3 months correlation between Alakasa and Bayu is 0.34. Overlapping area represents the amount of risk that can be diversified away by holding Alakasa Industrindo Tbk and Bayu Buana Tbk in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Bayu Buana Tbk and Alakasa Industrindo 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 Alakasa Industrindo Tbk are associated (or correlated) with Bayu Buana. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Bayu Buana Tbk has no effect on the direction of Alakasa Industrindo i.e., Alakasa Industrindo and Bayu Buana go up and down completely randomly.
Pair Corralation between Alakasa Industrindo and Bayu Buana
Assuming the 90 days trading horizon Alakasa Industrindo is expected to generate 2.01 times less return on investment than Bayu Buana. In addition to that, Alakasa Industrindo is 2.59 times more volatile than Bayu Buana Tbk. It trades about 0.0 of its total potential returns per unit of risk. Bayu Buana Tbk is currently generating about 0.02 per unit of volatility. If you would invest 130,418 in Bayu Buana Tbk on September 1, 2024 and sell it today you would earn a total of 3,582 from holding Bayu Buana Tbk or generate 2.75% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Alakasa Industrindo Tbk vs. Bayu Buana Tbk
Performance |
| Timeline |
| Alakasa Industrindo Tbk |
| Bayu Buana Tbk |
Alakasa Industrindo and Bayu Buana Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Alakasa Industrindo and Bayu Buana
The main advantage of trading using opposite Alakasa Industrindo and Bayu Buana positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Alakasa Industrindo position performs unexpectedly, Bayu Buana 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 Bayu Buana will offset losses from the drop in Bayu Buana's long position.| Alakasa Industrindo vs. Argha Karya Prima | Alakasa Industrindo vs. Alumindo Light Metal | Alakasa Industrindo vs. Asiaplast Industries Tbk | Alakasa Industrindo vs. Akbar Indomakmur Stimec |
| Bayu Buana vs. Japfa Comfeed Indonesia | Bayu Buana vs. Charoen Pokphand Indonesia | Bayu Buana vs. Erajaya Swasembada Tbk | Bayu Buana vs. Indofood Cbp Sukses |
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 Global Markets Map module to get a quick overview of global market snapshot using zoomable world map. Drill down to check world indexes.
Other Complementary Tools
| Portfolio Holdings Check your current holdings and cash postion to detemine if your portfolio needs rebalancing | |
| Portfolio Backtesting Avoid under-diversification and over-optimization by backtesting your portfolios | |
| Portfolio Comparator Compare the composition, asset allocations and performance of any two portfolios in your account | |
| Latest Portfolios Quick portfolio dashboard that showcases your latest portfolios | |
| Theme Ratings Determine theme ratings based on digital equity recommendations. Macroaxis theme ratings are based on combination of fundamental analysis and risk-adjusted market performance |