Correlation Between Bakrie Brothers and Lima Dua
Can any of the company-specific risk be diversified away by investing in both Bakrie Brothers and Lima Dua 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 Lima Dua 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 Lima Dua Lima, you can compare the effects of market volatilities on Bakrie Brothers and Lima Dua 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 Lima Dua. Check out your portfolio center. Please also check ongoing floating volatility patterns of Bakrie Brothers and Lima Dua.
Diversification Opportunities for Bakrie Brothers and Lima Dua
-0.64 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Bakrie and Lima is -0.64. Overlapping area represents the amount of risk that can be diversified away by holding Bakrie Brothers Tbk and Lima Dua Lima in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Lima Dua Lima 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 Lima Dua. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Lima Dua Lima has no effect on the direction of Bakrie Brothers i.e., Bakrie Brothers and Lima Dua go up and down completely randomly.
Pair Corralation between Bakrie Brothers and Lima Dua
Assuming the 90 days trading horizon Bakrie Brothers Tbk is expected to generate 0.69 times more return on investment than Lima Dua. However, Bakrie Brothers Tbk is 1.45 times less risky than Lima Dua. It trades about 0.01 of its potential returns per unit of risk. Lima Dua Lima is currently generating about -0.2 per unit of risk. If you would invest 3,600 in Bakrie Brothers Tbk on November 27, 2024 and sell it today you would earn a total of 0.00 from holding Bakrie Brothers Tbk or generate 0.0% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Bakrie Brothers Tbk vs. Lima Dua Lima
Performance |
| Timeline |
| Bakrie Brothers Tbk |
| Lima Dua Lima |
Bakrie Brothers and Lima Dua Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Bakrie Brothers and Lima Dua
The main advantage of trading using opposite Bakrie Brothers and Lima Dua positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Bakrie Brothers position performs unexpectedly, Lima Dua 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 Lima Dua will offset losses from the drop in Lima Dua'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 |
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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 Manager module to state of the art Portfolio Manager to monitor and improve performance of your invested capital.
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