Correlation Between Baramulti Suksessarana and Alfa Energi
Can any of the company-specific risk be diversified away by investing in both Baramulti Suksessarana and Alfa Energi 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 Baramulti Suksessarana and Alfa Energi into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Baramulti Suksessarana Tbk and Alfa Energi Investama, you can compare the effects of market volatilities on Baramulti Suksessarana and Alfa Energi 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 Baramulti Suksessarana with a short position of Alfa Energi. Check out your portfolio center. Please also check ongoing floating volatility patterns of Baramulti Suksessarana and Alfa Energi.
Diversification Opportunities for Baramulti Suksessarana and Alfa Energi
0.54 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Baramulti and Alfa is 0.54. Overlapping area represents the amount of risk that can be diversified away by holding Baramulti Suksessarana Tbk and Alfa Energi Investama in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Alfa Energi Investama and Baramulti Suksessarana 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 Baramulti Suksessarana Tbk are associated (or correlated) with Alfa Energi. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Alfa Energi Investama has no effect on the direction of Baramulti Suksessarana i.e., Baramulti Suksessarana and Alfa Energi go up and down completely randomly.
Pair Corralation between Baramulti Suksessarana and Alfa Energi
Assuming the 90 days trading horizon Baramulti Suksessarana Tbk is expected to generate 0.71 times more return on investment than Alfa Energi. However, Baramulti Suksessarana Tbk is 1.4 times less risky than Alfa Energi. It trades about -0.13 of its potential returns per unit of risk. Alfa Energi Investama is currently generating about -0.29 per unit of risk. If you would invest 447,122 in Baramulti Suksessarana Tbk on August 27, 2024 and sell it today you would lose (18,122) from holding Baramulti Suksessarana Tbk or give up 4.05% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Baramulti Suksessarana Tbk vs. Alfa Energi Investama
Performance |
| Timeline |
| Baramulti Suksessarana |
| Alfa Energi Investama |
Baramulti Suksessarana and Alfa Energi Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Baramulti Suksessarana and Alfa Energi
The main advantage of trading using opposite Baramulti Suksessarana and Alfa Energi positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Baramulti Suksessarana position performs unexpectedly, Alfa Energi 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 Alfa Energi will offset losses from the drop in Alfa Energi's long position.| Baramulti Suksessarana vs. Mitrabara Adiperdana PT | Baramulti Suksessarana vs. Bayan Resources Tbk | Baramulti Suksessarana vs. Abm Investama Tbk | Baramulti Suksessarana vs. TBS Energi Utama |
| Alfa Energi vs. Borneo Olah Sarana | Alfa Energi vs. Kapuas Prima Coal | Alfa Energi vs. Central Omega Resources | Alfa Energi vs. Buana Listya Tama |
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 Odds Of Bankruptcy module to get analysis of equity chance of financial distress in the next 2 years.
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