Correlation Between Arita Prima and Bintang Oto
Can any of the company-specific risk be diversified away by investing in both Arita Prima and Bintang Oto 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 Arita Prima and Bintang Oto into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Arita Prima Indonesia and Bintang Oto Global, you can compare the effects of market volatilities on Arita Prima and Bintang Oto 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 Arita Prima with a short position of Bintang Oto. Check out your portfolio center. Please also check ongoing floating volatility patterns of Arita Prima and Bintang Oto.
Diversification Opportunities for Arita Prima and Bintang Oto
-0.14 | Correlation Coefficient |
Good diversification
The 3 months correlation between Arita and Bintang is -0.14. Overlapping area represents the amount of risk that can be diversified away by holding Arita Prima Indonesia and Bintang Oto Global in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Bintang Oto Global and Arita Prima 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 Arita Prima Indonesia are associated (or correlated) with Bintang Oto. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Bintang Oto Global has no effect on the direction of Arita Prima i.e., Arita Prima and Bintang Oto go up and down completely randomly.
Pair Corralation between Arita Prima and Bintang Oto
Assuming the 90 days trading horizon Arita Prima Indonesia is expected to generate 1.13 times more return on investment than Bintang Oto. However, Arita Prima is 1.13 times more volatile than Bintang Oto Global. It trades about -0.09 of its potential returns per unit of risk. Bintang Oto Global is currently generating about -0.49 per unit of risk. If you would invest 18,000 in Arita Prima Indonesia on August 30, 2024 and sell it today you would lose (500.00) from holding Arita Prima Indonesia or give up 2.78% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Arita Prima Indonesia vs. Bintang Oto Global
Performance |
| Timeline |
| Arita Prima Indonesia |
| Bintang Oto Global |
Arita Prima and Bintang Oto Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Arita Prima and Bintang Oto
The main advantage of trading using opposite Arita Prima and Bintang Oto positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Arita Prima position performs unexpectedly, Bintang Oto 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 Bintang Oto will offset losses from the drop in Bintang Oto's long position.| Arita Prima vs. Bintang Mitra Semestaraya | Arita Prima vs. Alkindo Naratama Tbk | Arita Prima vs. Bayu Buana Tbk | Arita Prima vs. Austindo Nusantara Jaya |
| Bintang Oto vs. Pembangunan Jaya Ancol | Bintang Oto vs. Panorama Sentrawisata Tbk | Bintang Oto vs. Millennium Pharmacon International | Bintang Oto vs. Tempo Inti Media |
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 Funds Screener module to find actively-traded funds from around the world traded on over 30 global exchanges.
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