Correlation Between Bakrie Brothers and Fks Multi
Can any of the company-specific risk be diversified away by investing in both Bakrie Brothers and Fks Multi 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 Bakrie Brothers and Fks Multi into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Bakrie Brothers Tbk and Fks Multi Agro, you can compare the effects of market volatilities on Bakrie Brothers and Fks Multi 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 Bakrie Brothers with a short position of Fks Multi. Check out your portfolio center. Please also check ongoing floating volatility patterns of Bakrie Brothers and Fks Multi.
Diversification Opportunities for Bakrie Brothers and Fks Multi
0.45 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Bakrie and Fks is 0.45. Overlapping area represents the amount of risk that can be diversified away by holding Bakrie Brothers Tbk and Fks Multi Agro in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Fks Multi Agro and Bakrie Brothers 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 Bakrie Brothers Tbk are associated (or correlated) with Fks Multi. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Fks Multi Agro has no effect on the direction of Bakrie Brothers i.e., Bakrie Brothers and Fks Multi go up and down completely randomly.
Pair Corralation between Bakrie Brothers and Fks Multi
Assuming the 90 days trading horizon Bakrie Brothers Tbk is expected to under-perform the Fks Multi. In addition to that, Bakrie Brothers is 1.67 times more volatile than Fks Multi Agro. It trades about -0.01 of its total potential returns per unit of risk. Fks Multi Agro is currently generating about 0.07 per unit of volatility. If you would invest 601,782 in Fks Multi Agro on August 30, 2024 and sell it today you would earn a total of 483,218 from holding Fks Multi Agro or generate 80.3% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 99.79% |
| Values | Daily Returns |
Bakrie Brothers Tbk vs. Fks Multi Agro
Performance |
| Timeline |
| Bakrie Brothers Tbk |
| Fks Multi Agro |
Bakrie Brothers and Fks Multi Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Bakrie Brothers and Fks Multi
The main advantage of trading using opposite Bakrie Brothers and Fks Multi positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Bakrie Brothers position performs unexpectedly, Fks Multi 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 Fks Multi will offset losses from the drop in Fks Multi's long position.| Bakrie Brothers vs. Bakrieland Development Tbk | Bakrie Brothers vs. Bakrie Sumatera Plantations | Bakrie Brothers vs. Energi Mega Persada | Bakrie Brothers vs. Darma Henwa Tbk |
| Fks Multi vs. Bakrieland Development Tbk | Fks Multi vs. Bakrie Brothers Tbk | Fks Multi vs. Energi Mega Persada | Fks Multi vs. Sampoerna Agro 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 ETF Categories module to list of ETF categories grouped based on various criteria, such as the investment strategy or type of investments.
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