Correlation Between Bakrie Brothers and Geoprima Solusi
Can any of the company-specific risk be diversified away by investing in both Bakrie Brothers and Geoprima Solusi 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 Geoprima Solusi 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 Geoprima Solusi Tbk, you can compare the effects of market volatilities on Bakrie Brothers and Geoprima Solusi 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 Geoprima Solusi. Check out your portfolio center. Please also check ongoing floating volatility patterns of Bakrie Brothers and Geoprima Solusi.
Diversification Opportunities for Bakrie Brothers and Geoprima Solusi
-0.08 | Correlation Coefficient |
Good diversification
The 3 months correlation between Bakrie and Geoprima is -0.08. Overlapping area represents the amount of risk that can be diversified away by holding Bakrie Brothers Tbk and Geoprima Solusi Tbk in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Geoprima Solusi Tbk 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 Geoprima Solusi. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Geoprima Solusi Tbk has no effect on the direction of Bakrie Brothers i.e., Bakrie Brothers and Geoprima Solusi go up and down completely randomly.
Pair Corralation between Bakrie Brothers and Geoprima Solusi
Assuming the 90 days trading horizon Bakrie Brothers is expected to generate 22.91 times less return on investment than Geoprima Solusi. But when comparing it to its historical volatility, Bakrie Brothers Tbk is 3.43 times less risky than Geoprima Solusi. It trades about 0.01 of its potential returns per unit of risk. Geoprima Solusi Tbk is currently generating about 0.09 of returns per unit of risk over similar time horizon. If you would invest 35,000 in Geoprima Solusi Tbk on November 28, 2024 and sell it today you would earn a total of 3,000 from holding Geoprima Solusi Tbk or generate 8.57% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Bakrie Brothers Tbk vs. Geoprima Solusi Tbk
Performance |
| Timeline |
| Bakrie Brothers Tbk |
| Geoprima Solusi Tbk |
Bakrie Brothers and Geoprima Solusi Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Bakrie Brothers and Geoprima Solusi
The main advantage of trading using opposite Bakrie Brothers and Geoprima Solusi positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Bakrie Brothers position performs unexpectedly, Geoprima Solusi 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 Geoprima Solusi will offset losses from the drop in Geoprima Solusi'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 |
| Geoprima Solusi vs. Pacific Strategic Financial | Geoprima Solusi vs. Garuda Metalindo Tbk | Geoprima Solusi vs. Metrodata Electronics Tbk | Geoprima Solusi vs. Lippo General Insurance |
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 Rebalancing module to analyze risk-adjusted returns against different time horizons to find asset-allocation targets.
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