Correlation Between Capital Financial and Bintang Oto
Can any of the company-specific risk be diversified away by investing in both Capital Financial and Bintang Oto 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 Capital Financial and Bintang Oto into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Capital Financial Indonesia and Bintang Oto Global, you can compare the effects of market volatilities on Capital Financial and Bintang Oto 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 Capital Financial with a short position of Bintang Oto. Check out your portfolio center. Please also check ongoing floating volatility patterns of Capital Financial and Bintang Oto.
Diversification Opportunities for Capital Financial and Bintang Oto
-0.37 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Capital and Bintang is -0.37. Overlapping area represents the amount of risk that can be diversified away by holding Capital Financial Indonesia and Bintang Oto Global in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Bintang Oto Global and Capital Financial 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 Capital Financial Indonesia are associated (or correlated) with Bintang Oto. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Bintang Oto Global has no effect on the direction of Capital Financial i.e., Capital Financial and Bintang Oto go up and down completely randomly.
Pair Corralation between Capital Financial and Bintang Oto
Assuming the 90 days trading horizon Capital Financial Indonesia is expected to generate 0.83 times more return on investment than Bintang Oto. However, Capital Financial Indonesia is 1.21 times less risky than Bintang Oto. It trades about 0.02 of its potential returns per unit of risk. Bintang Oto Global is currently generating about -0.2 per unit of risk. If you would invest 50,000 in Capital Financial Indonesia on August 25, 2024 and sell it today you would earn a total of 1,000.00 from holding Capital Financial Indonesia or generate 2.0% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 98.46% |
| Values | Daily Returns |
Capital Financial Indonesia vs. Bintang Oto Global
Performance |
| Timeline |
| Capital Financial |
| Bintang Oto Global |
Capital Financial and Bintang Oto Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Capital Financial and Bintang Oto
The main advantage of trading using opposite Capital Financial and Bintang Oto positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Capital Financial position performs unexpectedly, Bintang Oto 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 Bintang Oto will offset losses from the drop in Bintang Oto's long position.| Capital Financial vs. Paninvest Tbk | Capital Financial vs. Maskapai Reasuransi Indonesia | Capital Financial vs. Panin Sekuritas Tbk | Capital Financial vs. Wahana Ottomitra Multiartha |
| Bintang Oto vs. Surya Permata Andalan | Bintang Oto vs. Aneka Gas Industri | Bintang Oto vs. Buana Listya Tama | Bintang Oto vs. Trisula Textile Industries |
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 Efficient Frontier module to plot and analyze your portfolio and positions against risk-return landscape of the market..
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