Correlation Between PT Barito and Takkt AG
Can any of the company-specific risk be diversified away by investing in both PT Barito and Takkt AG 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 Takkt AG 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 Takkt AG, you can compare the effects of market volatilities on PT Barito and Takkt AG 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 Takkt AG. Check out your portfolio center. Please also check ongoing floating volatility patterns of PT Barito and Takkt AG.
Diversification Opportunities for PT Barito and Takkt AG
Poor diversification
The 3 months correlation between OB8 and Takkt is 0.71. Overlapping area represents the amount of risk that can be diversified away by holding PT Barito Pacific and Takkt AG in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Takkt AG 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 Takkt AG. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Takkt AG has no effect on the direction of PT Barito i.e., PT Barito and Takkt AG go up and down completely randomly.
Pair Corralation between PT Barito and Takkt AG
Assuming the 90 days horizon PT Barito Pacific is expected to generate 3.96 times more return on investment than Takkt AG. However, PT Barito is 3.96 times more volatile than Takkt AG. It trades about 0.03 of its potential returns per unit of risk. Takkt AG is currently generating about -0.07 per unit of risk. If you would invest 5.29 in PT Barito Pacific on September 14, 2024 and sell it today you would lose (0.84) from holding PT Barito Pacific or give up 15.88% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 99.64% |
| Values | Daily Returns |
PT Barito Pacific vs. Takkt AG
Performance |
| Timeline |
| PT Barito Pacific |
| Takkt AG |
PT Barito and Takkt AG Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with PT Barito and Takkt AG
The main advantage of trading using opposite PT Barito and Takkt AG positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if PT Barito position performs unexpectedly, Takkt AG 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 Takkt AG will offset losses from the drop in Takkt AG's long position.| PT Barito vs. Carnegie Clean Energy | PT Barito vs. QURATE RETAIL INC | PT Barito vs. PRECISION DRILLING P | PT Barito vs. SALESFORCE INC CDR |
| Takkt AG vs. FUJIFILM Holdings | Takkt AG vs. Avery Dennison Corp | Takkt AG vs. Konica Minolta | Takkt AG vs. KOKUYO LTD |
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 Suggestion module to get suggestions outside of your existing asset allocation including your own model portfolios.
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