Correlation Between SCOTT TECHNOLOGY and PT Barito
Can any of the company-specific risk be diversified away by investing in both SCOTT TECHNOLOGY and PT Barito 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 SCOTT TECHNOLOGY and PT Barito into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between SCOTT TECHNOLOGY and PT Barito Pacific, you can compare the effects of market volatilities on SCOTT TECHNOLOGY and PT Barito 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 SCOTT TECHNOLOGY with a short position of PT Barito. Check out your portfolio center. Please also check ongoing floating volatility patterns of SCOTT TECHNOLOGY and PT Barito.
Diversification Opportunities for SCOTT TECHNOLOGY and PT Barito
-0.21 | Correlation Coefficient |
Very good diversification
The 3 months correlation between SCOTT and OB8 is -0.21. Overlapping area represents the amount of risk that can be diversified away by holding SCOTT TECHNOLOGY and PT Barito Pacific in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on PT Barito Pacific and SCOTT TECHNOLOGY 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 SCOTT TECHNOLOGY are associated (or correlated) with PT Barito. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of PT Barito Pacific has no effect on the direction of SCOTT TECHNOLOGY i.e., SCOTT TECHNOLOGY and PT Barito go up and down completely randomly.
Pair Corralation between SCOTT TECHNOLOGY and PT Barito
Assuming the 90 days trading horizon SCOTT TECHNOLOGY is expected to generate 15.81 times less return on investment than PT Barito. But when comparing it to its historical volatility, SCOTT TECHNOLOGY is 3.43 times less risky than PT Barito. It trades about 0.01 of its potential returns per unit of risk. PT Barito Pacific is currently generating about 0.05 of returns per unit of risk over similar time horizon. If you would invest 3.48 in PT Barito Pacific on September 3, 2024 and sell it today you would earn a total of 0.52 from holding PT Barito Pacific or generate 14.94% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
SCOTT TECHNOLOGY vs. PT Barito Pacific
Performance |
| Timeline |
| SCOTT TECHNOLOGY |
| PT Barito Pacific |
SCOTT TECHNOLOGY and PT Barito Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with SCOTT TECHNOLOGY and PT Barito
The main advantage of trading using opposite SCOTT TECHNOLOGY and PT Barito positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if SCOTT TECHNOLOGY position performs unexpectedly, PT Barito 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 PT Barito will offset losses from the drop in PT Barito's long position.| SCOTT TECHNOLOGY vs. TOTAL GABON | SCOTT TECHNOLOGY vs. Walgreens Boots Alliance | SCOTT TECHNOLOGY vs. Peak Resources Limited |
| PT Barito vs. Zijin Mining Group | PT Barito vs. ScanSource | PT Barito vs. Eidesvik Offshore ASA | PT Barito vs. BW OFFSHORE 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 Optimization module to compute new portfolio that will generate highest expected return given your specified tolerance for risk.
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