Correlation Between Indo Oil and Buyung Poetra
Can any of the company-specific risk be diversified away by investing in both Indo Oil and Buyung Poetra 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 Indo Oil and Buyung Poetra into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Indo Oil Perkasa and Buyung Poetra Sembada, you can compare the effects of market volatilities on Indo Oil and Buyung Poetra 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 Indo Oil with a short position of Buyung Poetra. Check out your portfolio center. Please also check ongoing floating volatility patterns of Indo Oil and Buyung Poetra.
Diversification Opportunities for Indo Oil and Buyung Poetra
0.56 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Indo and Buyung is 0.56. Overlapping area represents the amount of risk that can be diversified away by holding Indo Oil Perkasa and Buyung Poetra Sembada in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Buyung Poetra Sembada and Indo Oil 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 Indo Oil Perkasa are associated (or correlated) with Buyung Poetra. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Buyung Poetra Sembada has no effect on the direction of Indo Oil i.e., Indo Oil and Buyung Poetra go up and down completely randomly.
Pair Corralation between Indo Oil and Buyung Poetra
Assuming the 90 days trading horizon Indo Oil Perkasa is expected to under-perform the Buyung Poetra. But the stock apears to be less risky and, when comparing its historical volatility, Indo Oil Perkasa is 3.68 times less risky than Buyung Poetra. The stock trades about -0.19 of its potential returns per unit of risk. The Buyung Poetra Sembada is currently generating about 0.1 of returns per unit of risk over similar time horizon. If you would invest 11,400 in Buyung Poetra Sembada on August 30, 2024 and sell it today you would earn a total of 1,000.00 from holding Buyung Poetra Sembada or generate 8.77% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Indo Oil Perkasa vs. Buyung Poetra Sembada
Performance |
| Timeline |
| Indo Oil Perkasa |
| Buyung Poetra Sembada |
Indo Oil and Buyung Poetra Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Indo Oil and Buyung Poetra
The main advantage of trading using opposite Indo Oil and Buyung Poetra positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Indo Oil position performs unexpectedly, Buyung Poetra 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 Buyung Poetra will offset losses from the drop in Buyung Poetra's long position.| Indo Oil vs. Sentra Food Indonesia | Indo Oil vs. Buyung Poetra Sembada | Indo Oil vs. Garudafood Putra Putri | Indo Oil vs. Campina Ice Cream |
| Buyung Poetra vs. Bakrieland Development Tbk | Buyung Poetra vs. Bakrie Brothers Tbk | Buyung Poetra vs. Energi Mega Persada | Buyung Poetra vs. Sampoerna Agro 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 My Watchlist Analysis module to analyze my current watchlist and to refresh optimization strategy. Macroaxis watchlist is based on self-learning algorithm to remember stocks you like.
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