Correlation Between Bima Sakti and Repower Asia
Can any of the company-specific risk be diversified away by investing in both Bima Sakti and Repower Asia 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 Bima Sakti and Repower Asia into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Bima Sakti Pertiwi and Repower Asia Indonesia, you can compare the effects of market volatilities on Bima Sakti and Repower Asia 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 Bima Sakti with a short position of Repower Asia. Check out your portfolio center. Please also check ongoing floating volatility patterns of Bima Sakti and Repower Asia.
Diversification Opportunities for Bima Sakti and Repower Asia
0.19 | Correlation Coefficient |
Average diversification
The 3 months correlation between Bima and Repower is 0.19. Overlapping area represents the amount of risk that can be diversified away by holding Bima Sakti Pertiwi and Repower Asia Indonesia in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Repower Asia Indonesia and Bima Sakti 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 Bima Sakti Pertiwi are associated (or correlated) with Repower Asia. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Repower Asia Indonesia has no effect on the direction of Bima Sakti i.e., Bima Sakti and Repower Asia go up and down completely randomly.
Pair Corralation between Bima Sakti and Repower Asia
Assuming the 90 days trading horizon Bima Sakti Pertiwi is expected to under-perform the Repower Asia. But the stock apears to be less risky and, when comparing its historical volatility, Bima Sakti Pertiwi is 2.41 times less risky than Repower Asia. The stock trades about -0.04 of its potential returns per unit of risk. The Repower Asia Indonesia is currently generating about 0.02 of returns per unit of risk over similar time horizon. If you would invest 800.00 in Repower Asia Indonesia on August 28, 2024 and sell it today you would earn a total of 0.00 from holding Repower Asia Indonesia or generate 0.0% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Bima Sakti Pertiwi vs. Repower Asia Indonesia
Performance |
| Timeline |
| Bima Sakti Pertiwi |
| Repower Asia Indonesia |
Bima Sakti and Repower Asia Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Bima Sakti and Repower Asia
The main advantage of trading using opposite Bima Sakti and Repower Asia positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Bima Sakti position performs unexpectedly, Repower Asia 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 Repower Asia will offset losses from the drop in Repower Asia's long position.| Bima Sakti vs. Indo Acidatama Tbk | Bima Sakti vs. Indorama Synthetics Tbk | Bima Sakti vs. PT UBC Medical | Bima Sakti vs. Capital Financial Indonesia |
| Repower Asia vs. Bumi Benowo Sukses | Repower Asia vs. Andalan Sakti Primaindo | Repower Asia vs. Bhakti Multi Artha | Repower Asia vs. Greenwood Sejahtera 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 Content Syndication module to quickly integrate customizable finance content to your own investment portal.
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