Correlation Between Bakrie Brothers and Pioneerindo Gourmet
Can any of the company-specific risk be diversified away by investing in both Bakrie Brothers and Pioneerindo Gourmet 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 Pioneerindo Gourmet 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 Pioneerindo Gourmet International, you can compare the effects of market volatilities on Bakrie Brothers and Pioneerindo Gourmet 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 Pioneerindo Gourmet. Check out your portfolio center. Please also check ongoing floating volatility patterns of Bakrie Brothers and Pioneerindo Gourmet.
Diversification Opportunities for Bakrie Brothers and Pioneerindo Gourmet
-0.36 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Bakrie and Pioneerindo is -0.36. Overlapping area represents the amount of risk that can be diversified away by holding Bakrie Brothers Tbk and Pioneerindo Gourmet Internatio in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Pioneerindo Gourmet 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 Pioneerindo Gourmet. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Pioneerindo Gourmet has no effect on the direction of Bakrie Brothers i.e., Bakrie Brothers and Pioneerindo Gourmet go up and down completely randomly.
Pair Corralation between Bakrie Brothers and Pioneerindo Gourmet
Assuming the 90 days trading horizon Bakrie Brothers Tbk is expected to generate 0.59 times more return on investment than Pioneerindo Gourmet. However, Bakrie Brothers Tbk is 1.71 times less risky than Pioneerindo Gourmet. It trades about 0.01 of its potential returns per unit of risk. Pioneerindo Gourmet International is currently generating about -0.08 per unit of risk. If you would invest 5,000 in Bakrie Brothers Tbk on August 25, 2024 and sell it today you would lose (300.00) from holding Bakrie Brothers Tbk or give up 6.0% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Bakrie Brothers Tbk vs. Pioneerindo Gourmet Internatio
Performance |
| Timeline |
| Bakrie Brothers Tbk |
| Pioneerindo Gourmet |
Bakrie Brothers and Pioneerindo Gourmet Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Bakrie Brothers and Pioneerindo Gourmet
The main advantage of trading using opposite Bakrie Brothers and Pioneerindo Gourmet positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Bakrie Brothers position performs unexpectedly, Pioneerindo Gourmet 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 Pioneerindo Gourmet will offset losses from the drop in Pioneerindo Gourmet's long position.| Bakrie Brothers vs. Rukun Raharja Tbk | Bakrie Brothers vs. PT Temas Tbk | Bakrie Brothers vs. Weha Transportasi Indonesia |
| Pioneerindo Gourmet vs. PT Dewi Shri | Pioneerindo Gourmet vs. Bangun Karya Perkasa | Pioneerindo Gourmet vs. Gaya Abadi Sempurna | Pioneerindo Gourmet vs. Habco Trans Maritima |
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 Watchlist Optimization module to optimize watchlists to build efficient portfolios or rebalance existing positions based on the mean-variance optimization algorithm.
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