Correlation Between Baramulti Suksessarana and Repower Asia
Can any of the company-specific risk be diversified away by investing in both Baramulti Suksessarana and Repower Asia 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 Repower Asia 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 Repower Asia Indonesia, you can compare the effects of market volatilities on Baramulti Suksessarana and Repower Asia 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 Repower Asia. Check out your portfolio center. Please also check ongoing floating volatility patterns of Baramulti Suksessarana and Repower Asia.
Diversification Opportunities for Baramulti Suksessarana and Repower Asia
0.79 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Baramulti and Repower is 0.79. Overlapping area represents the amount of risk that can be diversified away by holding Baramulti Suksessarana Tbk and Repower Asia Indonesia in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Repower Asia Indonesia 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 Repower Asia. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Repower Asia Indonesia has no effect on the direction of Baramulti Suksessarana i.e., Baramulti Suksessarana and Repower Asia go up and down completely randomly.
Pair Corralation between Baramulti Suksessarana and Repower Asia
Assuming the 90 days trading horizon Baramulti Suksessarana Tbk is expected to generate 0.2 times more return on investment than Repower Asia. However, Baramulti Suksessarana Tbk is 5.08 times less risky than Repower Asia. It trades about 0.07 of its potential returns per unit of risk. Repower Asia Indonesia is currently generating about -0.02 per unit of risk. If you would invest 284,713 in Baramulti Suksessarana Tbk on August 31, 2024 and sell it today you would earn a total of 134,287 from holding Baramulti Suksessarana Tbk or generate 47.17% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Baramulti Suksessarana Tbk vs. Repower Asia Indonesia
Performance |
| Timeline |
| Baramulti Suksessarana |
| Repower Asia Indonesia |
Baramulti Suksessarana and Repower Asia Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Baramulti Suksessarana and Repower Asia
The main advantage of trading using opposite Baramulti Suksessarana and Repower Asia positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Baramulti Suksessarana position performs unexpectedly, Repower Asia 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 Repower Asia will offset losses from the drop in Repower Asia'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 |
| Repower Asia vs. Prima Alloy Steel | Repower Asia vs. Trinitan Metals and | Repower Asia vs. PT Homeco Victoria | Repower Asia vs. Steel Pipe Industry |
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 FinTech Suite module to use AI to screen and filter profitable investment opportunities.
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