Correlation Between Bakrie Brothers and Petrosea Tbk
Can any of the company-specific risk be diversified away by investing in both Bakrie Brothers and Petrosea 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 Bakrie Brothers and Petrosea Tbk 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 Petrosea Tbk, you can compare the effects of market volatilities on Bakrie Brothers and Petrosea 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 Bakrie Brothers with a short position of Petrosea Tbk. Check out your portfolio center. Please also check ongoing floating volatility patterns of Bakrie Brothers and Petrosea Tbk.
Diversification Opportunities for Bakrie Brothers and Petrosea Tbk
0.78 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Bakrie and Petrosea is 0.78. Overlapping area represents the amount of risk that can be diversified away by holding Bakrie Brothers Tbk and Petrosea Tbk in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Petrosea 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 Petrosea Tbk. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Petrosea Tbk has no effect on the direction of Bakrie Brothers i.e., Bakrie Brothers and Petrosea Tbk go up and down completely randomly.
Pair Corralation between Bakrie Brothers and Petrosea Tbk
Assuming the 90 days trading horizon Bakrie Brothers is expected to generate 3.55 times less return on investment than Petrosea Tbk. In addition to that, Bakrie Brothers is 1.08 times more volatile than Petrosea Tbk. It trades about 0.05 of its total potential returns per unit of risk. Petrosea Tbk is currently generating about 0.18 per unit of volatility. If you would invest 765,000 in Petrosea Tbk on August 30, 2024 and sell it today you would earn a total of 1,120,000 from holding Petrosea Tbk or generate 146.41% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Bakrie Brothers Tbk vs. Petrosea Tbk
Performance |
| Timeline |
| Bakrie Brothers Tbk |
| Petrosea Tbk |
Bakrie Brothers and Petrosea Tbk Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Bakrie Brothers and Petrosea Tbk
The main advantage of trading using opposite Bakrie Brothers and Petrosea Tbk positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Bakrie Brothers position performs unexpectedly, Petrosea 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 Petrosea Tbk will offset losses from the drop in Petrosea Tbk'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 |
| Petrosea Tbk vs. Indika Energy Tbk | Petrosea Tbk vs. Harum Energy Tbk | Petrosea Tbk vs. Indo Tambangraya Megah | Petrosea Tbk vs. Gajah Tunggal 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 Companies Directory module to evaluate performance of over 100,000 Stocks, Funds, and ETFs against different fundamentals.
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