Correlation Between Bintang Oto and Capital Financial
Can any of the company-specific risk be diversified away by investing in both Bintang Oto and Capital Financial 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 Capital Financial 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 Capital Financial Indonesia, you can compare the effects of market volatilities on Bintang Oto and Capital Financial 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 Capital Financial. Check out your portfolio center. Please also check ongoing floating volatility patterns of Bintang Oto and Capital Financial.
Diversification Opportunities for Bintang Oto and Capital Financial
-0.37 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Bintang and Capital is -0.37. Overlapping area represents the amount of risk that can be diversified away by holding Bintang Oto Global and Capital Financial Indonesia in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Capital Financial 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 Capital Financial. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Capital Financial has no effect on the direction of Bintang Oto i.e., Bintang Oto and Capital Financial go up and down completely randomly.
Pair Corralation between Bintang Oto and Capital Financial
Assuming the 90 days trading horizon Bintang Oto Global is expected to under-perform the Capital Financial. But the stock apears to be less risky and, when comparing its historical volatility, Bintang Oto Global is 1.25 times less risky than Capital Financial. The stock trades about -0.11 of its potential returns per unit of risk. The Capital Financial Indonesia is currently generating about 0.01 of returns per unit of risk over similar time horizon. If you would invest 55,500 in Capital Financial Indonesia on August 25, 2024 and sell it today you would lose (4,500) from holding Capital Financial Indonesia or give up 8.11% 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. Capital Financial Indonesia
Performance |
| Timeline |
| Bintang Oto Global |
| Capital Financial |
Bintang Oto and Capital Financial Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Bintang Oto and Capital Financial
The main advantage of trading using opposite Bintang Oto and Capital Financial positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Bintang Oto position performs unexpectedly, Capital Financial 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 Capital Financial will offset losses from the drop in Capital Financial'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 |
| Capital Financial vs. Paninvest Tbk | Capital Financial vs. Maskapai Reasuransi Indonesia | Capital Financial vs. Panin Sekuritas Tbk | Capital Financial vs. Wahana Ottomitra Multiartha |
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 My Watchlist Analysis module to analyze my current watchlist and to refresh optimization strategy. Macroaxis watchlist is based on self-learning algorithm to remember stocks you like.
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