Correlation Between Indosat Tbk and Bakrie Brothers
Can any of the company-specific risk be diversified away by investing in both Indosat Tbk and Bakrie Brothers 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 Indosat Tbk and Bakrie Brothers into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Indosat Tbk and Bakrie Brothers Tbk, you can compare the effects of market volatilities on Indosat Tbk and Bakrie Brothers 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 Indosat Tbk with a short position of Bakrie Brothers. Check out your portfolio center. Please also check ongoing floating volatility patterns of Indosat Tbk and Bakrie Brothers.
Diversification Opportunities for Indosat Tbk and Bakrie Brothers
-0.45 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Indosat and Bakrie is -0.45. Overlapping area represents the amount of risk that can be diversified away by holding Indosat Tbk and Bakrie Brothers Tbk in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Bakrie Brothers Tbk and Indosat 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 Indosat Tbk are associated (or correlated) with Bakrie Brothers. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Bakrie Brothers Tbk has no effect on the direction of Indosat Tbk i.e., Indosat Tbk and Bakrie Brothers go up and down completely randomly.
Pair Corralation between Indosat Tbk and Bakrie Brothers
Assuming the 90 days trading horizon Indosat Tbk is expected to under-perform the Bakrie Brothers. In addition to that, Indosat Tbk is 1.95 times more volatile than Bakrie Brothers Tbk. It trades about -0.13 of its total potential returns per unit of risk. Bakrie Brothers Tbk is currently generating about 0.1 per unit of volatility. If you would invest 3,700 in Bakrie Brothers Tbk on September 2, 2024 and sell it today you would earn a total of 1,000.00 from holding Bakrie Brothers Tbk or generate 27.03% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Indosat Tbk vs. Bakrie Brothers Tbk
Performance |
| Timeline |
| Indosat Tbk |
| Bakrie Brothers Tbk |
Indosat Tbk and Bakrie Brothers Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Indosat Tbk and Bakrie Brothers
The main advantage of trading using opposite Indosat Tbk and Bakrie Brothers positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Indosat Tbk position performs unexpectedly, Bakrie Brothers 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 Bakrie Brothers will offset losses from the drop in Bakrie Brothers' long position.| Indosat Tbk vs. Astra Agro Lestari | Indosat Tbk vs. Vale Indonesia Tbk | Indosat Tbk vs. Timah Persero Tbk | Indosat Tbk vs. Medco Energi Internasional |
| Bakrie Brothers vs. Bakrieland Development Tbk | Bakrie Brothers vs. Bakrie Sumatera Plantations | Bakrie Brothers vs. Energi Mega Persada | Bakrie Brothers vs. Darma Henwa 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 Earnings Calls module to check upcoming earnings announcements updated hourly across public exchanges.
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