Correlation Between Ford and PT Buana
Can any of the company-specific risk be diversified away by investing in both Ford and PT Buana 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 Ford and PT Buana into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Ford Motor and PT Buana Artha, you can compare the effects of market volatilities on Ford and PT Buana 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 Ford with a short position of PT Buana. Check out your portfolio center. Please also check ongoing floating volatility patterns of Ford and PT Buana.
Diversification Opportunities for Ford and PT Buana
Pay attention - limited upside
The 3 months correlation between Ford and STAR is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding Ford Motor and PT Buana Artha in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on PT Buana Artha and Ford 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 Ford Motor are associated (or correlated) with PT Buana. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of PT Buana Artha has no effect on the direction of Ford i.e., Ford and PT Buana go up and down completely randomly.
Pair Corralation between Ford and PT Buana
If you would invest 1,022 in Ford Motor on September 4, 2024 and sell it today you would earn a total of 76.00 from holding Ford Motor or generate 7.44% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Flat |
| Strength | Insignificant |
| Accuracy | 95.24% |
| Values | Daily Returns |
Ford Motor vs. PT Buana Artha
Performance |
| Timeline |
| Ford Motor |
| PT Buana Artha |
Ford and PT Buana Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Ford and PT Buana
The main advantage of trading using opposite Ford and PT Buana positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Ford position performs unexpectedly, PT Buana 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 PT Buana will offset losses from the drop in PT Buana's long position.The idea behind Ford Motor and PT Buana Artha 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.| PT Buana vs. Trisula International Tbk | PT Buana vs. Ricky Putra Globalindo | PT Buana vs. Sunson Textile Manufacturer | PT Buana vs. Sejahteraraya Anugrahjaya 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 Balance Of Power module to check stock momentum by analyzing Balance Of Power indicator and other technical ratios.
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