Correlation Between Bayu Buana and Indoritel Makmur
Can any of the company-specific risk be diversified away by investing in both Bayu Buana and Indoritel Makmur 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 Bayu Buana and Indoritel Makmur into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Bayu Buana Tbk and Indoritel Makmur Internasional, you can compare the effects of market volatilities on Bayu Buana and Indoritel Makmur 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 Bayu Buana with a short position of Indoritel Makmur. Check out your portfolio center. Please also check ongoing floating volatility patterns of Bayu Buana and Indoritel Makmur.
Diversification Opportunities for Bayu Buana and Indoritel Makmur
0.4 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Bayu and Indoritel is 0.4. Overlapping area represents the amount of risk that can be diversified away by holding Bayu Buana Tbk and Indoritel Makmur Internasional in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Indoritel Makmur Int and Bayu Buana 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 Bayu Buana Tbk are associated (or correlated) with Indoritel Makmur. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Indoritel Makmur Int has no effect on the direction of Bayu Buana i.e., Bayu Buana and Indoritel Makmur go up and down completely randomly.
Pair Corralation between Bayu Buana and Indoritel Makmur
Assuming the 90 days trading horizon Bayu Buana Tbk is expected to under-perform the Indoritel Makmur. In addition to that, Bayu Buana is 1.39 times more volatile than Indoritel Makmur Internasional. It trades about -0.08 of its total potential returns per unit of risk. Indoritel Makmur Internasional is currently generating about 0.0 per unit of volatility. If you would invest 920,000 in Indoritel Makmur Internasional on October 25, 2024 and sell it today you would lose (2,500) from holding Indoritel Makmur Internasional or give up 0.27% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Bayu Buana Tbk vs. Indoritel Makmur Internasional
Performance |
| Timeline |
| Bayu Buana Tbk |
| Indoritel Makmur Int |
Bayu Buana and Indoritel Makmur Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Bayu Buana and Indoritel Makmur
The main advantage of trading using opposite Bayu Buana and Indoritel Makmur positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Bayu Buana position performs unexpectedly, Indoritel Makmur 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 Indoritel Makmur will offset losses from the drop in Indoritel Makmur's long position.| Bayu Buana vs. Akbar Indomakmur Stimec | Bayu Buana vs. Mahaka Media Tbk | Bayu Buana vs. Fortune Indonesia Tbk | Bayu Buana vs. Gema Grahasarana Tbk |
| Indoritel Makmur vs. Fast Food Indonesia | Indoritel Makmur vs. Centratama Telekomunikasi Ind | Indoritel Makmur vs. Sumber Alfaria Trijaya | Indoritel Makmur vs. Bayu Buana 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 Bonds Directory module to find actively traded corporate debentures issued by US companies.
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