Correlation Between Indo Kordsa and Blue Bird
Can any of the company-specific risk be diversified away by investing in both Indo Kordsa and Blue Bird 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 Indo Kordsa and Blue Bird into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Indo Kordsa Tbk and Blue Bird Tbk, you can compare the effects of market volatilities on Indo Kordsa and Blue Bird 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 Indo Kordsa with a short position of Blue Bird. Check out your portfolio center. Please also check ongoing floating volatility patterns of Indo Kordsa and Blue Bird.
Diversification Opportunities for Indo Kordsa and Blue Bird
0.6 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Indo and Blue is 0.6. Overlapping area represents the amount of risk that can be diversified away by holding Indo Kordsa Tbk and Blue Bird Tbk in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Blue Bird Tbk and Indo Kordsa 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 Indo Kordsa Tbk are associated (or correlated) with Blue Bird. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Blue Bird Tbk has no effect on the direction of Indo Kordsa i.e., Indo Kordsa and Blue Bird go up and down completely randomly.
Pair Corralation between Indo Kordsa and Blue Bird
Assuming the 90 days trading horizon Indo Kordsa is expected to generate 1.92 times less return on investment than Blue Bird. In addition to that, Indo Kordsa is 1.08 times more volatile than Blue Bird Tbk. It trades about 0.04 of its total potential returns per unit of risk. Blue Bird Tbk is currently generating about 0.09 per unit of volatility. If you would invest 158,500 in Blue Bird Tbk on November 3, 2024 and sell it today you would earn a total of 4,500 from holding Blue Bird Tbk or generate 2.84% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Indo Kordsa Tbk vs. Blue Bird Tbk
Performance |
| Timeline |
| Indo Kordsa Tbk |
| Blue Bird Tbk |
Indo Kordsa and Blue Bird Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Indo Kordsa and Blue Bird
The main advantage of trading using opposite Indo Kordsa and Blue Bird positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Indo Kordsa position performs unexpectedly, Blue Bird 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 Blue Bird will offset losses from the drop in Blue Bird's long position.| Indo Kordsa vs. Goodyear Indonesia Tbk | Indo Kordsa vs. Indospring Tbk | Indo Kordsa vs. Ever Shine Textile | Indo Kordsa vs. Indorama Synthetics Tbk |
| Blue Bird vs. Adi Sarana Armada | Blue Bird vs. Mitra Keluarga Karyasehat | Blue Bird vs. Matahari Department Store | Blue Bird vs. Soechi Lines 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 Balance Of Power module to check stock momentum by analyzing Balance Of Power indicator and other technical ratios.
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