Correlation Between Buyung Poetra and Sariguna Primatirta
Can any of the company-specific risk be diversified away by investing in both Buyung Poetra and Sariguna Primatirta 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 Buyung Poetra and Sariguna Primatirta into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Buyung Poetra Sembada and Sariguna Primatirta PT, you can compare the effects of market volatilities on Buyung Poetra and Sariguna Primatirta 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 Buyung Poetra with a short position of Sariguna Primatirta. Check out your portfolio center. Please also check ongoing floating volatility patterns of Buyung Poetra and Sariguna Primatirta.
Diversification Opportunities for Buyung Poetra and Sariguna Primatirta
-0.18 | Correlation Coefficient |
Good diversification
The 3 months correlation between Buyung and Sariguna is -0.18. Overlapping area represents the amount of risk that can be diversified away by holding Buyung Poetra Sembada and Sariguna Primatirta PT in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Sariguna Primatirta and Buyung Poetra 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 Buyung Poetra Sembada are associated (or correlated) with Sariguna Primatirta. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Sariguna Primatirta has no effect on the direction of Buyung Poetra i.e., Buyung Poetra and Sariguna Primatirta go up and down completely randomly.
Pair Corralation between Buyung Poetra and Sariguna Primatirta
Assuming the 90 days trading horizon Buyung Poetra Sembada is expected to under-perform the Sariguna Primatirta. In addition to that, Buyung Poetra is 1.1 times more volatile than Sariguna Primatirta PT. It trades about -0.04 of its total potential returns per unit of risk. Sariguna Primatirta PT is currently generating about 0.11 per unit of volatility. If you would invest 70,721 in Sariguna Primatirta PT on August 25, 2024 and sell it today you would earn a total of 52,779 from holding Sariguna Primatirta PT or generate 74.63% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Buyung Poetra Sembada vs. Sariguna Primatirta PT
Performance |
| Timeline |
| Buyung Poetra Sembada |
| Sariguna Primatirta |
Buyung Poetra and Sariguna Primatirta Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Buyung Poetra and Sariguna Primatirta
The main advantage of trading using opposite Buyung Poetra and Sariguna Primatirta positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Buyung Poetra position performs unexpectedly, Sariguna Primatirta 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 Sariguna Primatirta will offset losses from the drop in Sariguna Primatirta's long position.| Buyung Poetra vs. Charoen Pokphand Indonesia | Buyung Poetra vs. Kalbe Farma Tbk | Buyung Poetra vs. Indofood Cbp Sukses | Buyung Poetra vs. Akr Corporindo Tbk |
| Sariguna Primatirta vs. Charoen Pokphand Indonesia | Sariguna Primatirta vs. Kalbe Farma Tbk | Sariguna Primatirta vs. Indofood Cbp Sukses | Sariguna Primatirta vs. Akr Corporindo 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 Equity Forecasting module to use basic forecasting models to generate price predictions and determine price momentum.
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