Correlation Between Blue Bird and Soechi Lines
Can any of the company-specific risk be diversified away by investing in both Blue Bird and Soechi Lines 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 Soechi Lines 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 Soechi Lines Tbk, you can compare the effects of market volatilities on Blue Bird and Soechi Lines 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 Soechi Lines. Check out your portfolio center. Please also check ongoing floating volatility patterns of Blue Bird and Soechi Lines.
Diversification Opportunities for Blue Bird and Soechi Lines
0.27 | Correlation Coefficient |
Modest diversification
The 3 months correlation between Blue and Soechi is 0.27. Overlapping area represents the amount of risk that can be diversified away by holding Blue Bird Tbk and Soechi Lines Tbk in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Soechi Lines 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 Soechi Lines. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Soechi Lines Tbk has no effect on the direction of Blue Bird i.e., Blue Bird and Soechi Lines go up and down completely randomly.
Pair Corralation between Blue Bird and Soechi Lines
Assuming the 90 days trading horizon Blue Bird Tbk is expected to generate 1.18 times more return on investment than Soechi Lines. However, Blue Bird is 1.18 times more volatile than Soechi Lines Tbk. It trades about 0.03 of its potential returns per unit of risk. Soechi Lines Tbk is currently generating about -0.01 per unit of risk. If you would invest 174,539 in Blue Bird Tbk on September 3, 2024 and sell it today you would earn a total of 14,961 from holding Blue Bird Tbk or generate 8.57% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Blue Bird Tbk vs. Soechi Lines Tbk
Performance |
| Timeline |
| Blue Bird Tbk |
| Soechi Lines Tbk |
Blue Bird and Soechi Lines Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Blue Bird and Soechi Lines
The main advantage of trading using opposite Blue Bird and Soechi Lines positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Blue Bird position performs unexpectedly, Soechi Lines 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 Soechi Lines will offset losses from the drop in Soechi Lines' long position.| Blue Bird vs. Adi Sarana Armada | Blue Bird vs. Mitra Keluarga Karyasehat | Blue Bird vs. Matahari Department Store | Blue Bird vs. Soechi Lines Tbk |
| Soechi Lines vs. Samudera Indonesia Tbk | Soechi Lines vs. Buana Listya Tama | Soechi Lines vs. Mitrabahtera Segara Sejati | Soechi Lines vs. Bekasi Fajar Industrial |
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 Bollinger Bands module to use Bollinger Bands indicator to analyze target price for a given investing horizon.
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