Correlation Between BAKRIE SUMATERA and Caltagirone SpA
Can any of the company-specific risk be diversified away by investing in both BAKRIE SUMATERA and Caltagirone SpA 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 BAKRIE SUMATERA and Caltagirone SpA into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between BAKRIE SUMATERA PL and Caltagirone SpA, you can compare the effects of market volatilities on BAKRIE SUMATERA and Caltagirone SpA 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 BAKRIE SUMATERA with a short position of Caltagirone SpA. Check out your portfolio center. Please also check ongoing floating volatility patterns of BAKRIE SUMATERA and Caltagirone SpA.
Diversification Opportunities for BAKRIE SUMATERA and Caltagirone SpA
0.59 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between BAKRIE and Caltagirone is 0.59. Overlapping area represents the amount of risk that can be diversified away by holding BAKRIE SUMATERA PL and Caltagirone SpA in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Caltagirone SpA and BAKRIE SUMATERA 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 BAKRIE SUMATERA PL are associated (or correlated) with Caltagirone SpA. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Caltagirone SpA has no effect on the direction of BAKRIE SUMATERA i.e., BAKRIE SUMATERA and Caltagirone SpA go up and down completely randomly.
Pair Corralation between BAKRIE SUMATERA and Caltagirone SpA
Assuming the 90 days trading horizon BAKRIE SUMATERA is expected to generate 1.52 times less return on investment than Caltagirone SpA. In addition to that, BAKRIE SUMATERA is 1.44 times more volatile than Caltagirone SpA. It trades about 0.03 of its total potential returns per unit of risk. Caltagirone SpA is currently generating about 0.06 per unit of volatility. If you would invest 566.00 in Caltagirone SpA on September 4, 2024 and sell it today you would earn a total of 22.00 from holding Caltagirone SpA or generate 3.89% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 95.45% |
| Values | Daily Returns |
BAKRIE SUMATERA PL vs. Caltagirone SpA
Performance |
| Timeline |
| BAKRIE SUMATERA PL |
| Caltagirone SpA |
BAKRIE SUMATERA and Caltagirone SpA Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with BAKRIE SUMATERA and Caltagirone SpA
The main advantage of trading using opposite BAKRIE SUMATERA and Caltagirone SpA positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if BAKRIE SUMATERA position performs unexpectedly, Caltagirone SpA 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 Caltagirone SpA will offset losses from the drop in Caltagirone SpA's long position.| BAKRIE SUMATERA vs. TOTAL GABON | BAKRIE SUMATERA vs. Walgreens Boots Alliance | BAKRIE SUMATERA vs. Peak Resources Limited |
| Caltagirone SpA vs. Apple Inc | Caltagirone SpA vs. Apple Inc | Caltagirone SpA vs. Apple Inc | Caltagirone SpA vs. Apple Inc |
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 Analyzer module to portfolio analysis module that provides access to portfolio diagnostics and optimization engine.
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