Correlation Between Tunas Baru and Triputra Agro
Can any of the company-specific risk be diversified away by investing in both Tunas Baru and Triputra Agro 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 Tunas Baru and Triputra Agro into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Tunas Baru Lampung and Triputra Agro Persada, you can compare the effects of market volatilities on Tunas Baru and Triputra Agro 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 Tunas Baru with a short position of Triputra Agro. Check out your portfolio center. Please also check ongoing floating volatility patterns of Tunas Baru and Triputra Agro.
Diversification Opportunities for Tunas Baru and Triputra Agro
0.82 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Tunas and Triputra is 0.82. Overlapping area represents the amount of risk that can be diversified away by holding Tunas Baru Lampung and Triputra Agro Persada in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Triputra Agro Persada and Tunas Baru 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 Tunas Baru Lampung are associated (or correlated) with Triputra Agro. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Triputra Agro Persada has no effect on the direction of Tunas Baru i.e., Tunas Baru and Triputra Agro go up and down completely randomly.
Pair Corralation between Tunas Baru and Triputra Agro
Assuming the 90 days trading horizon Tunas Baru Lampung is expected to generate 0.49 times more return on investment than Triputra Agro. However, Tunas Baru Lampung is 2.04 times less risky than Triputra Agro. It trades about -0.11 of its potential returns per unit of risk. Triputra Agro Persada is currently generating about -0.09 per unit of risk. If you would invest 65,550 in Tunas Baru Lampung on August 29, 2024 and sell it today you would lose (2,050) from holding Tunas Baru Lampung or give up 3.13% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Tunas Baru Lampung vs. Triputra Agro Persada
Performance |
| Timeline |
| Tunas Baru Lampung |
| Triputra Agro Persada |
Tunas Baru and Triputra Agro Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Tunas Baru and Triputra Agro
The main advantage of trading using opposite Tunas Baru and Triputra Agro positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Tunas Baru position performs unexpectedly, Triputra Agro 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 Triputra Agro will offset losses from the drop in Triputra Agro's long position.| Tunas Baru vs. Bakrieland Development Tbk | Tunas Baru vs. Bakrie Brothers Tbk | Tunas Baru vs. Energi Mega Persada | Tunas Baru vs. Sampoerna Agro Tbk |
| Triputra Agro vs. Dharma Satya Nusantara | Triputra Agro vs. Saratoga Investama Sedaya | Triputra Agro vs. Surya Esa Perkasa | Triputra Agro vs. Elang Mahkota Teknologi |
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 Companies Directory module to evaluate performance of over 100,000 Stocks, Funds, and ETFs against different fundamentals.
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