Correlation Between PT Barito and Far East
Can any of the company-specific risk be diversified away by investing in both PT Barito and Far East 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 Far East 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 Far East Horizon, you can compare the effects of market volatilities on PT Barito and Far East 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 Far East. Check out your portfolio center. Please also check ongoing floating volatility patterns of PT Barito and Far East.
Diversification Opportunities for PT Barito and Far East
Very good diversification
The 3 months correlation between OB8 and Far is -0.38. Overlapping area represents the amount of risk that can be diversified away by holding PT Barito Pacific and Far East Horizon in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Far East Horizon 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 Far East. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Far East Horizon has no effect on the direction of PT Barito i.e., PT Barito and Far East go up and down completely randomly.
Pair Corralation between PT Barito and Far East
Assuming the 90 days horizon PT Barito is expected to generate 3.02 times less return on investment than Far East. In addition to that, PT Barito is 1.81 times more volatile than Far East Horizon. It trades about 0.05 of its total potential returns per unit of risk. Far East Horizon is currently generating about 0.25 per unit of volatility. If you would invest 55.00 in Far East Horizon on September 26, 2024 and sell it today you would earn a total of 8.00 from holding Far East Horizon or generate 14.55% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
PT Barito Pacific vs. Far East Horizon
Performance |
| Timeline |
| PT Barito Pacific |
| Far East Horizon |
PT Barito and Far East Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with PT Barito and Far East
The main advantage of trading using opposite PT Barito and Far East positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if PT Barito position performs unexpectedly, Far East 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 Far East will offset losses from the drop in Far East's long position.| PT Barito vs. Air Liquide SA | PT Barito vs. AIR LIQUIDE ADR | PT Barito vs. Shin Etsu Chemical Co | PT Barito vs. BASF SE |
| Far East vs. Walker Dunlop | Far East vs. Paragon Banking Group | Far East vs. Hercules Capital | Far East vs. DIVERSIFIED ROYALTY |
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 Portfolio Comparator module to compare the composition, asset allocations and performance of any two portfolios in your account.
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