Correlation Between Barito Pacific and Alkindo Naratama
Can any of the company-specific risk be diversified away by investing in both Barito Pacific and Alkindo Naratama 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 Barito Pacific and Alkindo Naratama into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Barito Pacific Tbk and Alkindo Naratama Tbk, you can compare the effects of market volatilities on Barito Pacific and Alkindo Naratama 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 Barito Pacific with a short position of Alkindo Naratama. Check out your portfolio center. Please also check ongoing floating volatility patterns of Barito Pacific and Alkindo Naratama.
Diversification Opportunities for Barito Pacific and Alkindo Naratama
-0.89 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Barito and Alkindo is -0.89. Overlapping area represents the amount of risk that can be diversified away by holding Barito Pacific Tbk and Alkindo Naratama Tbk in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Alkindo Naratama Tbk and Barito Pacific 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 Barito Pacific Tbk are associated (or correlated) with Alkindo Naratama. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Alkindo Naratama Tbk has no effect on the direction of Barito Pacific i.e., Barito Pacific and Alkindo Naratama go up and down completely randomly.
Pair Corralation between Barito Pacific and Alkindo Naratama
Assuming the 90 days trading horizon Barito Pacific Tbk is expected to under-perform the Alkindo Naratama. But the stock apears to be less risky and, when comparing its historical volatility, Barito Pacific Tbk is 1.05 times less risky than Alkindo Naratama. The stock trades about -0.14 of its potential returns per unit of risk. The Alkindo Naratama Tbk is currently generating about 0.2 of returns per unit of risk over similar time horizon. If you would invest 40,800 in Alkindo Naratama Tbk on August 28, 2024 and sell it today you would earn a total of 17,700 from holding Alkindo Naratama Tbk or generate 43.38% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Barito Pacific Tbk vs. Alkindo Naratama Tbk
Performance |
| Timeline |
| Barito Pacific Tbk |
| Alkindo Naratama Tbk |
Barito Pacific and Alkindo Naratama Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Barito Pacific and Alkindo Naratama
The main advantage of trading using opposite Barito Pacific and Alkindo Naratama positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Barito Pacific position performs unexpectedly, Alkindo Naratama 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 Alkindo Naratama will offset losses from the drop in Alkindo Naratama's long position.| Barito Pacific vs. Indah Kiat Pulp | Barito Pacific vs. Medco Energi Internasional | Barito Pacific vs. Vale Indonesia Tbk | Barito Pacific vs. Charoen Pokphand Indonesia |
| Alkindo Naratama vs. Kedaung Indah Can | Alkindo Naratama vs. Langgeng Makmur Industri | Alkindo Naratama vs. Kabelindo Murni Tbk | Alkindo Naratama vs. Mustika Ratu 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 Headlines Timeline module to stay connected to all market stories and filter out noise. Drill down to analyze hype elasticity.
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