Correlation Between Bintang Oto and Arita Prima
Can any of the company-specific risk be diversified away by investing in both Bintang Oto and Arita Prima 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 Bintang Oto and Arita Prima into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Bintang Oto Global and Arita Prima Indonesia, you can compare the effects of market volatilities on Bintang Oto and Arita Prima 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 Bintang Oto with a short position of Arita Prima. Check out your portfolio center. Please also check ongoing floating volatility patterns of Bintang Oto and Arita Prima.
Diversification Opportunities for Bintang Oto and Arita Prima
-0.13 | Correlation Coefficient |
Good diversification
The 3 months correlation between Bintang and Arita is -0.13. Overlapping area represents the amount of risk that can be diversified away by holding Bintang Oto Global and Arita Prima Indonesia in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Arita Prima Indonesia and Bintang Oto 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 Bintang Oto Global are associated (or correlated) with Arita Prima. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Arita Prima Indonesia has no effect on the direction of Bintang Oto i.e., Bintang Oto and Arita Prima go up and down completely randomly.
Pair Corralation between Bintang Oto and Arita Prima
Assuming the 90 days trading horizon Bintang Oto Global is expected to under-perform the Arita Prima. In addition to that, Bintang Oto is 1.34 times more volatile than Arita Prima Indonesia. It trades about -0.08 of its total potential returns per unit of risk. Arita Prima Indonesia is currently generating about -0.01 per unit of volatility. If you would invest 20,000 in Arita Prima Indonesia on August 27, 2024 and sell it today you would lose (1,700) from holding Arita Prima Indonesia or give up 8.5% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Bintang Oto Global vs. Arita Prima Indonesia
Performance |
| Timeline |
| Bintang Oto Global |
| Arita Prima Indonesia |
Bintang Oto and Arita Prima Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Bintang Oto and Arita Prima
The main advantage of trading using opposite Bintang Oto and Arita Prima positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Bintang Oto position performs unexpectedly, Arita Prima 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 Arita Prima will offset losses from the drop in Arita Prima's long position.| Bintang Oto vs. Surya Permata Andalan | Bintang Oto vs. Aneka Gas Industri | Bintang Oto vs. Buana Listya Tama | Bintang Oto vs. Trisula Textile Industries |
| Arita Prima vs. Alkindo Naratama Tbk | Arita Prima vs. Bayu Buana Tbk | Arita Prima vs. Austindo Nusantara Jaya | Arita Prima vs. Colorpak Indonesia 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 Premium Stories module to follow Macroaxis premium stories from verified contributors across different equity types, categories and coverage scope.
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