Correlation Between Buana Listya and TBS Energi
Can any of the company-specific risk be diversified away by investing in both Buana Listya and TBS 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 Buana Listya and TBS Energi into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Buana Listya Tama and TBS Energi Utama, you can compare the effects of market volatilities on Buana Listya and TBS 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 Buana Listya with a short position of TBS Energi. Check out your portfolio center. Please also check ongoing floating volatility patterns of Buana Listya and TBS Energi.
Diversification Opportunities for Buana Listya and TBS Energi
0.64 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Buana and TBS is 0.64. Overlapping area represents the amount of risk that can be diversified away by holding Buana Listya Tama and TBS Energi Utama in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on TBS Energi Utama and Buana Listya 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 Buana Listya Tama are associated (or correlated) with TBS Energi. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of TBS Energi Utama has no effect on the direction of Buana Listya i.e., Buana Listya and TBS Energi go up and down completely randomly.
Pair Corralation between Buana Listya and TBS Energi
Assuming the 90 days trading horizon Buana Listya Tama is expected to generate 1.15 times more return on investment than TBS Energi. However, Buana Listya is 1.15 times more volatile than TBS Energi Utama. It trades about -0.18 of its potential returns per unit of risk. TBS Energi Utama is currently generating about -0.22 per unit of risk. If you would invest 13,600 in Buana Listya Tama on August 27, 2024 and sell it today you would lose (2,700) from holding Buana Listya Tama or give up 19.85% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Buana Listya Tama vs. TBS Energi Utama
Performance |
| Timeline |
| Buana Listya Tama |
| TBS Energi Utama |
Buana Listya and TBS Energi Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Buana Listya and TBS Energi
The main advantage of trading using opposite Buana Listya and TBS Energi positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Buana Listya position performs unexpectedly, TBS 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 TBS Energi will offset losses from the drop in TBS Energi's long position.The idea behind Buana Listya Tama and TBS Energi Utama pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.| TBS Energi vs. Petrosea Tbk | TBS Energi vs. Harum Energy Tbk | TBS Energi vs. Perdana Karya Perkasa | TBS Energi vs. Samindo Resources 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 Anywhere module to track or share privately all of your investments from the convenience of any device.
Other Complementary Tools
| Equity Search Search for actively traded equities including funds and ETFs from over 30 global markets | |
| Price Ceiling Movement Calculate and plot Price Ceiling Movement for different equity instruments | |
| Portfolio Suggestion Get suggestions outside of your existing asset allocation including your own model portfolios | |
| Portfolio Dashboard Portfolio dashboard that provides centralized access to all your investments | |
| Equity Valuation Check real value of public entities based on technical and fundamental data |