Correlation Between PT Barito and EON SE
Can any of the company-specific risk be diversified away by investing in both PT Barito and EON SE 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 PT Barito and EON SE into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between PT Barito Pacific and EON SE, you can compare the effects of market volatilities on PT Barito and EON SE 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 PT Barito with a short position of EON SE. Check out your portfolio center. Please also check ongoing floating volatility patterns of PT Barito and EON SE.
Diversification Opportunities for PT Barito and EON SE
Very poor diversification
The 3 months correlation between OB8 and EON is 0.82. Overlapping area represents the amount of risk that can be diversified away by holding PT Barito Pacific and EON SE in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on EON SE and PT Barito 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 PT Barito Pacific are associated (or correlated) with EON SE. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of EON SE has no effect on the direction of PT Barito i.e., PT Barito and EON SE go up and down completely randomly.
Pair Corralation between PT Barito and EON SE
Assuming the 90 days horizon PT Barito Pacific is expected to under-perform the EON SE. In addition to that, PT Barito is 8.16 times more volatile than EON SE. It trades about -0.05 of its total potential returns per unit of risk. EON SE is currently generating about -0.08 per unit of volatility. If you would invest 1,244 in EON SE on September 1, 2024 and sell it today you would lose (28.00) from holding EON SE or give up 2.25% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
PT Barito Pacific vs. EON SE
Performance |
| Timeline |
| PT Barito Pacific |
| EON SE |
PT Barito and EON SE Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with PT Barito and EON SE
The main advantage of trading using opposite PT Barito and EON SE positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if PT Barito position performs unexpectedly, EON SE 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 EON SE will offset losses from the drop in EON SE's long position.| PT Barito vs. Darden Restaurants | PT Barito vs. X Fab Silicon | PT Barito vs. Cleanaway Waste Management | PT Barito vs. SCOTT TECHNOLOGY |
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 Analysis module to research over 250,000 global equities including funds, stocks and ETFs to find investment opportunities.
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