Correlation Between Indospring Tbk and Bintang Oto
Can any of the company-specific risk be diversified away by investing in both Indospring Tbk and Bintang Oto 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 Indospring Tbk and Bintang Oto into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Indospring Tbk and Bintang Oto Global, you can compare the effects of market volatilities on Indospring Tbk and Bintang Oto 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 Indospring Tbk with a short position of Bintang Oto. Check out your portfolio center. Please also check ongoing floating volatility patterns of Indospring Tbk and Bintang Oto.
Diversification Opportunities for Indospring Tbk and Bintang Oto
0.02 | Correlation Coefficient |
Significant diversification
The 3 months correlation between Indospring and Bintang is 0.02. Overlapping area represents the amount of risk that can be diversified away by holding Indospring Tbk and Bintang Oto Global in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Bintang Oto Global and Indospring Tbk 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 Indospring Tbk are associated (or correlated) with Bintang Oto. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Bintang Oto Global has no effect on the direction of Indospring Tbk i.e., Indospring Tbk and Bintang Oto go up and down completely randomly.
Pair Corralation between Indospring Tbk and Bintang Oto
Assuming the 90 days trading horizon Indospring Tbk is expected to under-perform the Bintang Oto. But the stock apears to be less risky and, when comparing its historical volatility, Indospring Tbk is 3.76 times less risky than Bintang Oto. The stock trades about -0.3 of its potential returns per unit of risk. The Bintang Oto Global is currently generating about 0.12 of returns per unit of risk over similar time horizon. If you would invest 55,000 in Bintang Oto Global on November 3, 2024 and sell it today you would earn a total of 3,500 from holding Bintang Oto Global or generate 6.36% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 95.0% |
| Values | Daily Returns |
Indospring Tbk vs. Bintang Oto Global
Performance |
| Timeline |
| Indospring Tbk |
| Bintang Oto Global |
Indospring Tbk and Bintang Oto Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Indospring Tbk and Bintang Oto
The main advantage of trading using opposite Indospring Tbk and Bintang Oto positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Indospring Tbk position performs unexpectedly, Bintang Oto 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 Bintang Oto will offset losses from the drop in Bintang Oto's long position.| Indospring Tbk vs. Indomobil Sukses Internasional | Indospring Tbk vs. Indorama Synthetics Tbk | Indospring Tbk vs. Astra Otoparts Tbk | Indospring Tbk vs. Jembo Cable |
| Bintang Oto vs. Surya Permata Andalan | Bintang Oto vs. Aneka Gas Industri | Bintang Oto vs. Buana Listya Tama | Bintang Oto vs. Trisula Textile Industries |
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 Piotroski F Score module to get Piotroski F Score based on the binary analysis strategy of nine different fundamentals.
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