Correlation Between Bakrie Brothers and Tunas Baru
Can any of the company-specific risk be diversified away by investing in both Bakrie Brothers and Tunas Baru 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 Tunas Baru 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 Tunas Baru Lampung, you can compare the effects of market volatilities on Bakrie Brothers and Tunas Baru 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 Tunas Baru. Check out your portfolio center. Please also check ongoing floating volatility patterns of Bakrie Brothers and Tunas Baru.
Diversification Opportunities for Bakrie Brothers and Tunas Baru
0.69 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Bakrie and Tunas is 0.69. Overlapping area represents the amount of risk that can be diversified away by holding Bakrie Brothers Tbk and Tunas Baru Lampung in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Tunas Baru Lampung 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 Tunas Baru. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Tunas Baru Lampung has no effect on the direction of Bakrie Brothers i.e., Bakrie Brothers and Tunas Baru go up and down completely randomly.
Pair Corralation between Bakrie Brothers and Tunas Baru
Assuming the 90 days trading horizon Bakrie Brothers Tbk is expected to generate 4.43 times more return on investment than Tunas Baru. However, Bakrie Brothers is 4.43 times more volatile than Tunas Baru Lampung. It trades about 0.11 of its potential returns per unit of risk. Tunas Baru Lampung is currently generating about 0.08 per unit of risk. If you would invest 3,800 in Bakrie Brothers Tbk on August 29, 2024 and sell it today you would earn a total of 800.00 from holding Bakrie Brothers Tbk or generate 21.05% 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. Tunas Baru Lampung
Performance |
| Timeline |
| Bakrie Brothers Tbk |
| Tunas Baru Lampung |
Bakrie Brothers and Tunas Baru Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Bakrie Brothers and Tunas Baru
The main advantage of trading using opposite Bakrie Brothers and Tunas Baru positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Bakrie Brothers position performs unexpectedly, Tunas Baru 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 Tunas Baru will offset losses from the drop in Tunas Baru'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 |
| Tunas Baru vs. Bakrieland Development Tbk | Tunas Baru vs. Bakrie Brothers Tbk | Tunas Baru vs. Energi Mega Persada | Tunas Baru 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 Technical Analysis module to check basic technical indicators and analysis based on most latest market data.
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