Correlation Between Bali Bintang and MD Pictures
Can any of the company-specific risk be diversified away by investing in both Bali Bintang and MD Pictures 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 Bali Bintang and MD Pictures into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Bali Bintang Sejahtera and MD Pictures Tbk, you can compare the effects of market volatilities on Bali Bintang and MD Pictures 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 Bali Bintang with a short position of MD Pictures. Check out your portfolio center. Please also check ongoing floating volatility patterns of Bali Bintang and MD Pictures.
Diversification Opportunities for Bali Bintang and MD Pictures
0.65 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Bali and FILM is 0.65. Overlapping area represents the amount of risk that can be diversified away by holding Bali Bintang Sejahtera and MD Pictures Tbk in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on MD Pictures Tbk and Bali Bintang 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 Bali Bintang Sejahtera are associated (or correlated) with MD Pictures. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of MD Pictures Tbk has no effect on the direction of Bali Bintang i.e., Bali Bintang and MD Pictures go up and down completely randomly.
Pair Corralation between Bali Bintang and MD Pictures
Assuming the 90 days trading horizon Bali Bintang Sejahtera is expected to under-perform the MD Pictures. But the stock apears to be less risky and, when comparing its historical volatility, Bali Bintang Sejahtera is 1.8 times less risky than MD Pictures. The stock trades about -0.06 of its potential returns per unit of risk. The MD Pictures Tbk is currently generating about 0.04 of returns per unit of risk over similar time horizon. If you would invest 210,707 in MD Pictures Tbk on September 3, 2024 and sell it today you would earn a total of 121,293 from holding MD Pictures Tbk or generate 57.56% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Bali Bintang Sejahtera vs. MD Pictures Tbk
Performance |
| Timeline |
| Bali Bintang Sejahtera |
| MD Pictures Tbk |
Bali Bintang and MD Pictures Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Bali Bintang and MD Pictures
The main advantage of trading using opposite Bali Bintang and MD Pictures positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Bali Bintang position performs unexpectedly, MD Pictures 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 MD Pictures will offset losses from the drop in MD Pictures' long position.| Bali Bintang vs. MD Pictures Tbk | Bali Bintang vs. MNC Studios International | Bali Bintang vs. MNC Vision Networks | Bali Bintang vs. Digital Mediatama Maxima |
| MD Pictures vs. MNC Studios International | MD Pictures vs. Elang Mahkota Teknologi | MD Pictures vs. Medikaloka Hermina PT | MD Pictures vs. Surya Esa Perkasa |
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 Earnings Calls module to check upcoming earnings announcements updated hourly across public exchanges.
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