Correlation Between Trans Power and Bintang Samudera
Can any of the company-specific risk be diversified away by investing in both Trans Power and Bintang Samudera 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 Trans Power and Bintang Samudera into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Trans Power Marine and Bintang Samudera Mandiri, you can compare the effects of market volatilities on Trans Power and Bintang Samudera 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 Trans Power with a short position of Bintang Samudera. Check out your portfolio center. Please also check ongoing floating volatility patterns of Trans Power and Bintang Samudera.
Diversification Opportunities for Trans Power and Bintang Samudera
0.47 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Trans and Bintang is 0.47. Overlapping area represents the amount of risk that can be diversified away by holding Trans Power Marine and Bintang Samudera Mandiri in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Bintang Samudera Mandiri and Trans Power 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 Trans Power Marine are associated (or correlated) with Bintang Samudera. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Bintang Samudera Mandiri has no effect on the direction of Trans Power i.e., Trans Power and Bintang Samudera go up and down completely randomly.
Pair Corralation between Trans Power and Bintang Samudera
Assuming the 90 days trading horizon Trans Power Marine is expected to generate 0.54 times more return on investment than Bintang Samudera. However, Trans Power Marine is 1.84 times less risky than Bintang Samudera. It trades about 0.05 of its potential returns per unit of risk. Bintang Samudera Mandiri is currently generating about -0.04 per unit of risk. If you would invest 38,845 in Trans Power Marine on August 24, 2024 and sell it today you would earn a total of 25,655 from holding Trans Power Marine or generate 66.04% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Trans Power Marine vs. Bintang Samudera Mandiri
Performance |
| Timeline |
| Trans Power Marine |
| Bintang Samudera Mandiri |
Trans Power and Bintang Samudera Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Trans Power and Bintang Samudera
The main advantage of trading using opposite Trans Power and Bintang Samudera positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Trans Power position performs unexpectedly, Bintang Samudera 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 Bintang Samudera will offset losses from the drop in Bintang Samudera's long position.| Trans Power vs. Samudera Indonesia Tbk | Trans Power vs. Steady Safe TBK | Trans Power vs. Rukun Raharja Tbk | Trans Power vs. PT Temas Tbk |
| Bintang Samudera vs. Bank Central Asia | Bintang Samudera vs. Bank Rakyat Indonesia | Bintang Samudera vs. Bayan Resources Tbk | Bintang Samudera vs. Bank Mandiri Persero |
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 Stock Tickers module to use high-impact, comprehensive, and customizable stock tickers that can be easily integrated to any websites.
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