Correlation Between Baramulti Suksessarana and Matahari Department
Can any of the company-specific risk be diversified away by investing in both Baramulti Suksessarana and Matahari Department 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 Matahari Department 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 Matahari Department Store, you can compare the effects of market volatilities on Baramulti Suksessarana and Matahari Department 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 Matahari Department. Check out your portfolio center. Please also check ongoing floating volatility patterns of Baramulti Suksessarana and Matahari Department.
Diversification Opportunities for Baramulti Suksessarana and Matahari Department
0.73 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Baramulti and Matahari is 0.73. Overlapping area represents the amount of risk that can be diversified away by holding Baramulti Suksessarana Tbk and Matahari Department Store in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Matahari Department Store 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 Matahari Department. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Matahari Department Store has no effect on the direction of Baramulti Suksessarana i.e., Baramulti Suksessarana and Matahari Department go up and down completely randomly.
Pair Corralation between Baramulti Suksessarana and Matahari Department
Assuming the 90 days trading horizon Baramulti Suksessarana Tbk is expected to generate 1.03 times more return on investment than Matahari Department. However, Baramulti Suksessarana is 1.03 times more volatile than Matahari Department Store. It trades about -0.23 of its potential returns per unit of risk. Matahari Department Store is currently generating about -0.36 per unit of risk. If you would invest 450,007 in Baramulti Suksessarana Tbk on August 31, 2024 and sell it today you would lose (31,007) from holding Baramulti Suksessarana Tbk or give up 6.89% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Baramulti Suksessarana Tbk vs. Matahari Department Store
Performance |
| Timeline |
| Baramulti Suksessarana |
| Matahari Department Store |
Baramulti Suksessarana and Matahari Department Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Baramulti Suksessarana and Matahari Department
The main advantage of trading using opposite Baramulti Suksessarana and Matahari Department positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Baramulti Suksessarana position performs unexpectedly, Matahari Department 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 Matahari Department will offset losses from the drop in Matahari Department'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 |
| Matahari Department vs. Surya Citra Media | Matahari Department vs. Akr Corporindo Tbk | Matahari Department vs. Media Nusantara Citra | Matahari Department vs. Pembangunan Perumahan PT |
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 Bond Analysis module to evaluate and analyze corporate bonds as a potential investment for your portfolios..
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