Correlation Between Barito Pacific and Supreme Cable
Can any of the company-specific risk be diversified away by investing in both Barito Pacific and Supreme Cable 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 Supreme Cable 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 Supreme Cable Manufacturing, you can compare the effects of market volatilities on Barito Pacific and Supreme Cable 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 Supreme Cable. Check out your portfolio center. Please also check ongoing floating volatility patterns of Barito Pacific and Supreme Cable.
Diversification Opportunities for Barito Pacific and Supreme Cable
-0.5 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Barito and Supreme is -0.5. Overlapping area represents the amount of risk that can be diversified away by holding Barito Pacific Tbk and Supreme Cable Manufacturing in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Supreme Cable Manufa 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 Supreme Cable. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Supreme Cable Manufa has no effect on the direction of Barito Pacific i.e., Barito Pacific and Supreme Cable go up and down completely randomly.
Pair Corralation between Barito Pacific and Supreme Cable
Assuming the 90 days trading horizon Barito Pacific is expected to generate 19.27 times less return on investment than Supreme Cable. But when comparing it to its historical volatility, Barito Pacific Tbk is 12.1 times less risky than Supreme Cable. It trades about 0.03 of its potential returns per unit of risk. Supreme Cable Manufacturing is currently generating about 0.04 of returns per unit of risk over similar time horizon. If you would invest 889,885 in Supreme Cable Manufacturing on August 27, 2024 and sell it today you would lose (670,885) from holding Supreme Cable Manufacturing or give up 75.39% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 99.72% |
| Values | Daily Returns |
Barito Pacific Tbk vs. Supreme Cable Manufacturing
Performance |
| Timeline |
| Barito Pacific Tbk |
| Supreme Cable Manufa |
Barito Pacific and Supreme Cable Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Barito Pacific and Supreme Cable
The main advantage of trading using opposite Barito Pacific and Supreme Cable positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Barito Pacific position performs unexpectedly, Supreme Cable 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 Supreme Cable will offset losses from the drop in Supreme Cable'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 |
| Supreme Cable vs. Voksel Electric Tbk | Supreme Cable vs. Kmi Wire And | Supreme Cable vs. Kabelindo Murni Tbk | Supreme Cable vs. Selamat Sempurna 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 Portfolio Diagnostics module to use generated alerts and portfolio events aggregator to diagnose current holdings.
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