Correlation Between Barito Pacific and Semen Baturaja
Can any of the company-specific risk be diversified away by investing in both Barito Pacific and Semen Baturaja 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 Semen Baturaja 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 Semen Baturaja Persero, you can compare the effects of market volatilities on Barito Pacific and Semen Baturaja 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 Semen Baturaja. Check out your portfolio center. Please also check ongoing floating volatility patterns of Barito Pacific and Semen Baturaja.
Diversification Opportunities for Barito Pacific and Semen Baturaja
0.66 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Barito and Semen is 0.66. Overlapping area represents the amount of risk that can be diversified away by holding Barito Pacific Tbk and Semen Baturaja Persero in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Semen Baturaja Persero 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 Semen Baturaja. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Semen Baturaja Persero has no effect on the direction of Barito Pacific i.e., Barito Pacific and Semen Baturaja go up and down completely randomly.
Pair Corralation between Barito Pacific and Semen Baturaja
Assuming the 90 days trading horizon Barito Pacific Tbk is expected to under-perform the Semen Baturaja. In addition to that, Barito Pacific is 1.25 times more volatile than Semen Baturaja Persero. It trades about -0.04 of its total potential returns per unit of risk. Semen Baturaja Persero is currently generating about 0.03 per unit of volatility. If you would invest 19,973 in Semen Baturaja Persero on September 1, 2024 and sell it today you would earn a total of 1,427 from holding Semen Baturaja Persero or generate 7.14% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 99.21% |
| Values | Daily Returns |
Barito Pacific Tbk vs. Semen Baturaja Persero
Performance |
| Timeline |
| Barito Pacific Tbk |
| Semen Baturaja Persero |
Barito Pacific and Semen Baturaja Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Barito Pacific and Semen Baturaja
The main advantage of trading using opposite Barito Pacific and Semen Baturaja positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Barito Pacific position performs unexpectedly, Semen Baturaja 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 Semen Baturaja will offset losses from the drop in Semen Baturaja's long position.| Barito Pacific vs. Perusahaan Gas Negara | Barito Pacific vs. Telkom Indonesia Tbk | Barito Pacific vs. Mitra Pinasthika Mustika | Barito Pacific vs. Jakarta Int Hotels |
| Semen Baturaja vs. Wijaya Karya Beton | Semen Baturaja vs. PP Properti Tbk | Semen Baturaja vs. Pembangunan Perumahan PT | Semen Baturaja vs. Waskita Karya Persero |
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 Instant Ratings module to determine any equity ratings based on digital recommendations. Macroaxis instant equity ratings are based on combination of fundamental analysis and risk-adjusted market performance.
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