Correlation Between Bali Towerindo and Trisula International
Can any of the company-specific risk be diversified away by investing in both Bali Towerindo and Trisula International 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 Bali Towerindo and Trisula International into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Bali Towerindo Sentra and Trisula International Tbk, you can compare the effects of market volatilities on Bali Towerindo and Trisula International 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 Bali Towerindo with a short position of Trisula International. Check out your portfolio center. Please also check ongoing floating volatility patterns of Bali Towerindo and Trisula International.
Diversification Opportunities for Bali Towerindo and Trisula International
0.16 | Correlation Coefficient |
Average diversification
The 3 months correlation between Bali and Trisula is 0.16. Overlapping area represents the amount of risk that can be diversified away by holding Bali Towerindo Sentra and Trisula International Tbk in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Trisula International Tbk and Bali Towerindo 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 Bali Towerindo Sentra are associated (or correlated) with Trisula International. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Trisula International Tbk has no effect on the direction of Bali Towerindo i.e., Bali Towerindo and Trisula International go up and down completely randomly.
Pair Corralation between Bali Towerindo and Trisula International
Assuming the 90 days trading horizon Bali Towerindo Sentra is expected to under-perform the Trisula International. In addition to that, Bali Towerindo is 3.11 times more volatile than Trisula International Tbk. It trades about -0.14 of its total potential returns per unit of risk. Trisula International Tbk is currently generating about -0.11 per unit of volatility. If you would invest 16,500 in Trisula International Tbk on December 3, 2024 and sell it today you would lose (500.00) from holding Trisula International Tbk or give up 3.03% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Bali Towerindo Sentra vs. Trisula International Tbk
Performance |
| Timeline |
| Bali Towerindo Sentra |
| Trisula International Tbk |
Bali Towerindo and Trisula International Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Bali Towerindo and Trisula International
The main advantage of trading using opposite Bali Towerindo and Trisula International positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Bali Towerindo position performs unexpectedly, Trisula International 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 Trisula International will offset losses from the drop in Trisula International's long position.| Bali Towerindo vs. Austindo Nusantara Jaya | ||
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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 Correlations module to find global opportunities by holding instruments from different markets.
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