Correlation Between Blue Bird and Indospring Tbk
Can any of the company-specific risk be diversified away by investing in both Blue Bird and Indospring Tbk 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 Blue Bird and Indospring Tbk into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Blue Bird Tbk and Indospring Tbk, you can compare the effects of market volatilities on Blue Bird and Indospring Tbk 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 Blue Bird with a short position of Indospring Tbk. Check out your portfolio center. Please also check ongoing floating volatility patterns of Blue Bird and Indospring Tbk.
Diversification Opportunities for Blue Bird and Indospring Tbk
-0.5 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Blue and Indospring is -0.5. Overlapping area represents the amount of risk that can be diversified away by holding Blue Bird Tbk and Indospring Tbk in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Indospring Tbk and Blue Bird 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 Blue Bird Tbk are associated (or correlated) with Indospring Tbk. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Indospring Tbk has no effect on the direction of Blue Bird i.e., Blue Bird and Indospring Tbk go up and down completely randomly.
Pair Corralation between Blue Bird and Indospring Tbk
Assuming the 90 days trading horizon Blue Bird Tbk is expected to generate 1.15 times more return on investment than Indospring Tbk. However, Blue Bird is 1.15 times more volatile than Indospring Tbk. It trades about -0.06 of its potential returns per unit of risk. Indospring Tbk is currently generating about -0.37 per unit of risk. If you would invest 205,000 in Blue Bird Tbk on August 29, 2024 and sell it today you would lose (5,000) from holding Blue Bird Tbk or give up 2.44% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Blue Bird Tbk vs. Indospring Tbk
Performance |
| Timeline |
| Blue Bird Tbk |
| Indospring Tbk |
Blue Bird and Indospring Tbk Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Blue Bird and Indospring Tbk
The main advantage of trading using opposite Blue Bird and Indospring Tbk positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Blue Bird position performs unexpectedly, Indospring Tbk 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 Indospring Tbk will offset losses from the drop in Indospring Tbk's long position.The idea behind Blue Bird Tbk and Indospring Tbk pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.| Indospring Tbk vs. Indomobil Sukses Internasional | Indospring Tbk vs. Goodyear Indonesia Tbk | Indospring Tbk vs. Indorama Synthetics Tbk | Indospring Tbk vs. Astra Otoparts 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 Anywhere module to track or share privately all of your investments from the convenience of any device.
Other Complementary Tools
| Analyst Advice Analyst recommendations and target price estimates broken down by several categories | |
| Risk-Return Analysis View associations between returns expected from investment and the risk you assume | |
| Positions Ratings Determine portfolio positions ratings based on digital equity recommendations. Macroaxis instant position ratings are based on combination of fundamental analysis and risk-adjusted market performance | |
| Idea Analyzer Analyze all characteristics, volatility and risk-adjusted return of Macroaxis ideas | |
| Share Portfolio Track or share privately all of your investments from the convenience of any device |