Correlation Between Bakrie Sumatera and Communication Cable
Can any of the company-specific risk be diversified away by investing in both Bakrie Sumatera and Communication Cable 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 Communication Cable into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Bakrie Sumatera Plantations and Communication Cable Systems, you can compare the effects of market volatilities on Bakrie Sumatera and Communication Cable 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 Communication Cable. Check out your portfolio center. Please also check ongoing floating volatility patterns of Bakrie Sumatera and Communication Cable.
Diversification Opportunities for Bakrie Sumatera and Communication Cable
-0.48 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Bakrie and Communication is -0.48. Overlapping area represents the amount of risk that can be diversified away by holding Bakrie Sumatera Plantations and Communication Cable Systems in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Communication Cable 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 Plantations are associated (or correlated) with Communication Cable. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Communication Cable has no effect on the direction of Bakrie Sumatera i.e., Bakrie Sumatera and Communication Cable go up and down completely randomly.
Pair Corralation between Bakrie Sumatera and Communication Cable
Assuming the 90 days trading horizon Bakrie Sumatera Plantations is expected to generate 0.51 times more return on investment than Communication Cable. However, Bakrie Sumatera Plantations is 1.95 times less risky than Communication Cable. It trades about 0.3 of its potential returns per unit of risk. Communication Cable Systems is currently generating about 0.12 per unit of risk. If you would invest 10,500 in Bakrie Sumatera Plantations on August 26, 2024 and sell it today you would earn a total of 2,200 from holding Bakrie Sumatera Plantations or generate 20.95% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Bakrie Sumatera Plantations vs. Communication Cable Systems
Performance |
| Timeline |
| Bakrie Sumatera Plan |
| Communication Cable |
Bakrie Sumatera and Communication Cable Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Bakrie Sumatera and Communication Cable
The main advantage of trading using opposite Bakrie Sumatera and Communication Cable positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Bakrie Sumatera position performs unexpectedly, Communication Cable 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 Communication Cable will offset losses from the drop in Communication Cable's long position.| Bakrie Sumatera vs. Charoen Pokphand Indonesia | Bakrie Sumatera vs. Kalbe Farma Tbk | Bakrie Sumatera vs. Indofood Cbp Sukses | Bakrie Sumatera vs. Akr Corporindo Tbk |
| Communication Cable vs. Hartadinata Abadi Tbk | Communication Cable vs. Estika Tata Tiara | Communication Cable vs. Garudafood Putra Putri | Communication Cable vs. PT Indonesia Kendaraan |
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 File Import module to quickly import all of your third-party portfolios from your local drive in csv format.
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