Correlation Between Fortune Indonesia and Bayu Buana
Can any of the company-specific risk be diversified away by investing in both Fortune Indonesia and Bayu 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 Fortune Indonesia and Bayu Buana into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Fortune Indonesia Tbk and Bayu Buana Tbk, you can compare the effects of market volatilities on Fortune Indonesia and Bayu 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 Fortune Indonesia with a short position of Bayu Buana. Check out your portfolio center. Please also check ongoing floating volatility patterns of Fortune Indonesia and Bayu Buana.
Diversification Opportunities for Fortune Indonesia and Bayu Buana
0.48 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Fortune and Bayu is 0.48. Overlapping area represents the amount of risk that can be diversified away by holding Fortune Indonesia Tbk and Bayu Buana Tbk in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Bayu Buana Tbk and Fortune Indonesia 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 Fortune Indonesia Tbk are associated (or correlated) with Bayu Buana. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Bayu Buana Tbk has no effect on the direction of Fortune Indonesia i.e., Fortune Indonesia and Bayu Buana go up and down completely randomly.
Pair Corralation between Fortune Indonesia and Bayu Buana
Assuming the 90 days trading horizon Fortune Indonesia Tbk is expected to generate 10.59 times more return on investment than Bayu Buana. However, Fortune Indonesia is 10.59 times more volatile than Bayu Buana Tbk. It trades about 0.05 of its potential returns per unit of risk. Bayu Buana Tbk is currently generating about -0.16 per unit of risk. If you would invest 350,000 in Fortune Indonesia Tbk on November 3, 2024 and sell it today you would earn a total of 6,000 from holding Fortune Indonesia Tbk or generate 1.71% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Fortune Indonesia Tbk vs. Bayu Buana Tbk
Performance |
| Timeline |
| Fortune Indonesia Tbk |
| Bayu Buana Tbk |
Fortune Indonesia and Bayu Buana Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Fortune Indonesia and Bayu Buana
The main advantage of trading using opposite Fortune Indonesia and Bayu Buana positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Fortune Indonesia position performs unexpectedly, Bayu 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 Bayu Buana will offset losses from the drop in Bayu Buana's long position.| Fortune Indonesia vs. Gema Grahasarana Tbk | Fortune Indonesia vs. Bayu Buana Tbk | Fortune Indonesia vs. Fast Food Indonesia | Fortune Indonesia vs. Mahaka Media Tbk |
| Bayu Buana vs. Catur Sentosa Adiprana | Bayu Buana vs. Fast Food Indonesia | Bayu Buana vs. Hero Supermarket Tbk | Bayu Buana vs. Graha Layar Prima |
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 Content Syndication module to quickly integrate customizable finance content to your own investment portal.
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