Correlation Between Indo Kordsa and Bintang Oto
Can any of the company-specific risk be diversified away by investing in both Indo Kordsa and Bintang Oto 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 Bintang Oto 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 Bintang Oto Global, you can compare the effects of market volatilities on Indo Kordsa and Bintang Oto 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 Bintang Oto. Check out your portfolio center. Please also check ongoing floating volatility patterns of Indo Kordsa and Bintang Oto.
Diversification Opportunities for Indo Kordsa and Bintang Oto
-0.38 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Indo and Bintang is -0.38. Overlapping area represents the amount of risk that can be diversified away by holding Indo Kordsa Tbk and Bintang Oto Global in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Bintang Oto Global 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 Bintang Oto. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Bintang Oto Global has no effect on the direction of Indo Kordsa i.e., Indo Kordsa and Bintang Oto go up and down completely randomly.
Pair Corralation between Indo Kordsa and Bintang Oto
Assuming the 90 days trading horizon Indo Kordsa is expected to generate 120.22 times less return on investment than Bintang Oto. But when comparing it to its historical volatility, Indo Kordsa Tbk is 1.69 times less risky than Bintang Oto. It trades about 0.0 of its potential returns per unit of risk. Bintang Oto Global is currently generating about 0.11 of returns per unit of risk over similar time horizon. If you would invest 52,500 in Bintang Oto Global on November 3, 2024 and sell it today you would earn a total of 6,000 from holding Bintang Oto Global or generate 11.43% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Indo Kordsa Tbk vs. Bintang Oto Global
Performance |
| Timeline |
| Indo Kordsa Tbk |
| Bintang Oto Global |
Indo Kordsa and Bintang Oto Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Indo Kordsa and Bintang Oto
The main advantage of trading using opposite Indo Kordsa and Bintang Oto positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Indo Kordsa position performs unexpectedly, Bintang Oto 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 Bintang Oto will offset losses from the drop in Bintang Oto's long position.| Indo Kordsa vs. Goodyear Indonesia Tbk | Indo Kordsa vs. Sepatu Bata Tbk | Indo Kordsa vs. Indospring Tbk | Indo Kordsa vs. Ever Shine Textile |
| Bintang Oto vs. Surya Permata Andalan | Bintang Oto vs. Aneka Gas Industri | Bintang Oto vs. Buana Listya Tama | Bintang Oto vs. Trisula Textile Industries |
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 Price Exposure Probability module to analyze equity upside and downside potential for a given time horizon across multiple markets.
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