Correlation Between Bintang Oto and Bali Towerindo
Can any of the company-specific risk be diversified away by investing in both Bintang Oto and Bali Towerindo 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 Bali Towerindo 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 Bali Towerindo Sentra, you can compare the effects of market volatilities on Bintang Oto and Bali Towerindo 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 Bali Towerindo. Check out your portfolio center. Please also check ongoing floating volatility patterns of Bintang Oto and Bali Towerindo.
Diversification Opportunities for Bintang Oto and Bali Towerindo
-0.59 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Bintang and Bali is -0.59. Overlapping area represents the amount of risk that can be diversified away by holding Bintang Oto Global and Bali Towerindo Sentra in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Bali Towerindo Sentra 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 Bali Towerindo. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Bali Towerindo Sentra has no effect on the direction of Bintang Oto i.e., Bintang Oto and Bali Towerindo go up and down completely randomly.
Pair Corralation between Bintang Oto and Bali Towerindo
Assuming the 90 days trading horizon Bintang Oto Global is expected to under-perform the Bali Towerindo. But the stock apears to be less risky and, when comparing its historical volatility, Bintang Oto Global is 4.06 times less risky than Bali Towerindo. The stock trades about -0.45 of its potential returns per unit of risk. The Bali Towerindo Sentra is currently generating about 0.51 of returns per unit of risk over similar time horizon. If you would invest 88,000 in Bali Towerindo Sentra on August 29, 2024 and sell it today you would earn a total of 59,500 from holding Bali Towerindo Sentra or generate 67.61% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 95.65% |
| Values | Daily Returns |
Bintang Oto Global vs. Bali Towerindo Sentra
Performance |
| Timeline |
| Bintang Oto Global |
| Bali Towerindo Sentra |
Bintang Oto and Bali Towerindo Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Bintang Oto and Bali Towerindo
The main advantage of trading using opposite Bintang Oto and Bali Towerindo positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Bintang Oto position performs unexpectedly, Bali Towerindo 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 Bali Towerindo will offset losses from the drop in Bali Towerindo'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 |
| Bali Towerindo vs. Bank Artos Indonesia | Bali Towerindo vs. PT Bukalapak | Bali Towerindo vs. Sumber Alfaria Trijaya | Bali Towerindo vs. Merdeka Copper Gold |
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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