Correlation Between Central Proteina and Bakrieland Development
Can any of the company-specific risk be diversified away by investing in both Central Proteina and Bakrieland Development 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 Central Proteina and Bakrieland Development into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Central Proteina Prima and Bakrieland Development Tbk, you can compare the effects of market volatilities on Central Proteina and Bakrieland Development 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 Central Proteina with a short position of Bakrieland Development. Check out your portfolio center. Please also check ongoing floating volatility patterns of Central Proteina and Bakrieland Development.
Diversification Opportunities for Central Proteina and Bakrieland Development
0.38 | Correlation Coefficient |
Weak diversification
The 3 months correlation between Central and Bakrieland is 0.38. Overlapping area represents the amount of risk that can be diversified away by holding Central Proteina Prima and Bakrieland Development Tbk in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Bakrieland Development and Central Proteina 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 Central Proteina Prima are associated (or correlated) with Bakrieland Development. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Bakrieland Development has no effect on the direction of Central Proteina i.e., Central Proteina and Bakrieland Development go up and down completely randomly.
Pair Corralation between Central Proteina and Bakrieland Development
If you would invest 5,000 in Central Proteina Prima on September 3, 2024 and sell it today you would earn a total of 0.00 from holding Central Proteina Prima or generate 0.0% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Central Proteina Prima vs. Bakrieland Development Tbk
Performance |
| Timeline |
| Central Proteina Prima |
| Bakrieland Development |
Central Proteina and Bakrieland Development Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Central Proteina and Bakrieland Development
The main advantage of trading using opposite Central Proteina and Bakrieland Development positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Central Proteina position performs unexpectedly, Bakrieland Development 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 Bakrieland Development will offset losses from the drop in Bakrieland Development's long position.| Central Proteina vs. Bakrie Brothers Tbk | Central Proteina vs. Bakrieland Development Tbk | Central Proteina vs. Darma Henwa Tbk | Central Proteina vs. Bakrie Sumatera Plantations |
| Bakrieland Development vs. Bakrie Brothers Tbk | Bakrieland Development vs. Bakrie Sumatera Plantations | Bakrieland Development vs. Energi Mega Persada | Bakrieland Development vs. Darma Henwa 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 Rebalancing module to analyze risk-adjusted returns against different time horizons to find asset-allocation targets.
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