Correlation Between Bintang Oto and Indospring Tbk
Can any of the company-specific risk be diversified away by investing in both Bintang Oto and Indospring Tbk 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 Indospring Tbk 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 Indospring Tbk, you can compare the effects of market volatilities on Bintang Oto and Indospring Tbk 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 Indospring Tbk. Check out your portfolio center. Please also check ongoing floating volatility patterns of Bintang Oto and Indospring Tbk.
Diversification Opportunities for Bintang Oto and Indospring Tbk
0.02 | Correlation Coefficient |
Significant diversification
The 3 months correlation between Bintang and Indospring is 0.02. Overlapping area represents the amount of risk that can be diversified away by holding Bintang Oto Global and Indospring Tbk in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Indospring Tbk 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 Indospring Tbk. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Indospring Tbk has no effect on the direction of Bintang Oto i.e., Bintang Oto and Indospring Tbk go up and down completely randomly.
Pair Corralation between Bintang Oto and Indospring Tbk
Assuming the 90 days trading horizon Bintang Oto Global is expected to generate 3.76 times more return on investment than Indospring Tbk. However, Bintang Oto is 3.76 times more volatile than Indospring Tbk. It trades about 0.12 of its potential returns per unit of risk. Indospring Tbk is currently generating about -0.3 per unit of risk. If you would invest 55,000 in Bintang Oto Global on November 3, 2024 and sell it today you would earn a total of 3,500 from holding Bintang Oto Global or generate 6.36% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 95.0% |
| Values | Daily Returns |
Bintang Oto Global vs. Indospring Tbk
Performance |
| Timeline |
| Bintang Oto Global |
| Indospring Tbk |
Bintang Oto and Indospring Tbk Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Bintang Oto and Indospring Tbk
The main advantage of trading using opposite Bintang Oto and Indospring Tbk positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Bintang Oto position performs unexpectedly, Indospring Tbk 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 Indospring Tbk will offset losses from the drop in Indospring Tbk'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 |
| Indospring Tbk vs. Indomobil Sukses Internasional | Indospring Tbk vs. Goodyear Indonesia Tbk | Indospring Tbk vs. Indorama Synthetics Tbk | Indospring Tbk vs. Astra Otoparts 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 Share Portfolio module to track or share privately all of your investments from the convenience of any device.
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