Correlation Between Barito Pacific and Panca Budi
Can any of the company-specific risk be diversified away by investing in both Barito Pacific and Panca Budi 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 Panca Budi 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 Panca Budi Idaman, you can compare the effects of market volatilities on Barito Pacific and Panca Budi 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 Panca Budi. Check out your portfolio center. Please also check ongoing floating volatility patterns of Barito Pacific and Panca Budi.
Diversification Opportunities for Barito Pacific and Panca Budi
-0.86 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Barito and Panca is -0.86. Overlapping area represents the amount of risk that can be diversified away by holding Barito Pacific Tbk and Panca Budi Idaman in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Panca Budi Idaman 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 Panca Budi. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Panca Budi Idaman has no effect on the direction of Barito Pacific i.e., Barito Pacific and Panca Budi go up and down completely randomly.
Pair Corralation between Barito Pacific and Panca Budi
Assuming the 90 days trading horizon Barito Pacific Tbk is expected to under-perform the Panca Budi. But the stock apears to be less risky and, when comparing its historical volatility, Barito Pacific Tbk is 1.25 times less risky than Panca Budi. The stock trades about -0.51 of its potential returns per unit of risk. The Panca Budi Idaman is currently generating about 0.18 of returns per unit of risk over similar time horizon. If you would invest 48,200 in Panca Budi Idaman on August 25, 2024 and sell it today you would earn a total of 4,800 from holding Panca Budi Idaman or generate 9.96% 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. Panca Budi Idaman
Performance |
| Timeline |
| Barito Pacific Tbk |
| Panca Budi Idaman |
Barito Pacific and Panca Budi Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Barito Pacific and Panca Budi
The main advantage of trading using opposite Barito Pacific and Panca Budi positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Barito Pacific position performs unexpectedly, Panca Budi 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 Panca Budi will offset losses from the drop in Panca Budi'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 |
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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 Portfolio File Import module to quickly import all of your third-party portfolios from your local drive in csv format.
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