Correlation Between Indorama Synthetics and Bima Sakti
Can any of the company-specific risk be diversified away by investing in both Indorama Synthetics and Bima Sakti 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 Indorama Synthetics and Bima Sakti into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Indorama Synthetics Tbk and Bima Sakti Pertiwi, you can compare the effects of market volatilities on Indorama Synthetics and Bima Sakti 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 Indorama Synthetics with a short position of Bima Sakti. Check out your portfolio center. Please also check ongoing floating volatility patterns of Indorama Synthetics and Bima Sakti.
Diversification Opportunities for Indorama Synthetics and Bima Sakti
0.43 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Indorama and Bima is 0.43. Overlapping area represents the amount of risk that can be diversified away by holding Indorama Synthetics Tbk and Bima Sakti Pertiwi in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Bima Sakti Pertiwi and Indorama Synthetics 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 Indorama Synthetics Tbk are associated (or correlated) with Bima Sakti. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Bima Sakti Pertiwi has no effect on the direction of Indorama Synthetics i.e., Indorama Synthetics and Bima Sakti go up and down completely randomly.
Pair Corralation between Indorama Synthetics and Bima Sakti
Assuming the 90 days trading horizon Indorama Synthetics Tbk is expected to under-perform the Bima Sakti. In addition to that, Indorama Synthetics is 1.33 times more volatile than Bima Sakti Pertiwi. It trades about -0.13 of its total potential returns per unit of risk. Bima Sakti Pertiwi is currently generating about -0.01 per unit of volatility. If you would invest 5,200 in Bima Sakti Pertiwi on August 28, 2024 and sell it today you would lose (100.00) from holding Bima Sakti Pertiwi or give up 1.92% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 98.44% |
| Values | Daily Returns |
Indorama Synthetics Tbk vs. Bima Sakti Pertiwi
Performance |
| Timeline |
| Indorama Synthetics Tbk |
| Bima Sakti Pertiwi |
Indorama Synthetics and Bima Sakti Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Indorama Synthetics and Bima Sakti
The main advantage of trading using opposite Indorama Synthetics and Bima Sakti positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Indorama Synthetics position performs unexpectedly, Bima Sakti 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 Bima Sakti will offset losses from the drop in Bima Sakti's long position.| Indorama Synthetics vs. Indospring Tbk | Indorama Synthetics vs. Indomobil Sukses Internasional | Indorama Synthetics vs. Sumi Indo Kabel | Indorama Synthetics vs. Goodyear Indonesia Tbk |
| Bima Sakti vs. Indo Acidatama Tbk | Bima Sakti vs. Indorama Synthetics Tbk | Bima Sakti vs. PT UBC Medical | Bima Sakti vs. Capital Financial Indonesia |
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 Investing Opportunities module to build portfolios using our predefined set of ideas and optimize them against your investing preferences.
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