Correlation Between Bintang Oto and Surya Permata
Can any of the company-specific risk be diversified away by investing in both Bintang Oto and Surya Permata 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 Surya Permata 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 Surya Permata Andalan, you can compare the effects of market volatilities on Bintang Oto and Surya Permata 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 Surya Permata. Check out your portfolio center. Please also check ongoing floating volatility patterns of Bintang Oto and Surya Permata.
Diversification Opportunities for Bintang Oto and Surya Permata
0.65 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Bintang and Surya is 0.65. Overlapping area represents the amount of risk that can be diversified away by holding Bintang Oto Global and Surya Permata Andalan in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Surya Permata Andalan 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 Surya Permata. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Surya Permata Andalan has no effect on the direction of Bintang Oto i.e., Bintang Oto and Surya Permata go up and down completely randomly.
Pair Corralation between Bintang Oto and Surya Permata
Assuming the 90 days trading horizon Bintang Oto Global is expected to under-perform the Surya Permata. But the stock apears to be less risky and, when comparing its historical volatility, Bintang Oto Global is 1.54 times less risky than Surya Permata. The stock trades about -0.45 of its potential returns per unit of risk. The Surya Permata Andalan is currently generating about -0.24 of returns per unit of risk over similar time horizon. If you would invest 15,000 in Surya Permata Andalan on August 29, 2024 and sell it today you would lose (1,400) from holding Surya Permata Andalan or give up 9.33% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Bintang Oto Global vs. Surya Permata Andalan
Performance |
| Timeline |
| Bintang Oto Global |
| Surya Permata Andalan |
Bintang Oto and Surya Permata Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Bintang Oto and Surya Permata
The main advantage of trading using opposite Bintang Oto and Surya Permata positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Bintang Oto position performs unexpectedly, Surya Permata 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 Surya Permata will offset losses from the drop in Surya Permata'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 |
| Surya Permata vs. Jasa Armada Indonesia | Surya Permata vs. Cahayaputra Asa Keramik | Surya Permata vs. Campina Ice Cream |
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 Stock Tickers module to use high-impact, comprehensive, and customizable stock tickers that can be easily integrated to any websites.
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