Correlation Between Bakrie Sumatera and Ace Oldfields
Can any of the company-specific risk be diversified away by investing in both Bakrie Sumatera and Ace Oldfields 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 Ace Oldfields 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 Ace Oldfields PT, you can compare the effects of market volatilities on Bakrie Sumatera and Ace Oldfields 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 Ace Oldfields. Check out your portfolio center. Please also check ongoing floating volatility patterns of Bakrie Sumatera and Ace Oldfields.
Diversification Opportunities for Bakrie Sumatera and Ace Oldfields
-0.46 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Bakrie and Ace is -0.46. Overlapping area represents the amount of risk that can be diversified away by holding Bakrie Sumatera Plantations and Ace Oldfields PT in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Ace Oldfields PT 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 Ace Oldfields. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Ace Oldfields PT has no effect on the direction of Bakrie Sumatera i.e., Bakrie Sumatera and Ace Oldfields go up and down completely randomly.
Pair Corralation between Bakrie Sumatera and Ace Oldfields
Assuming the 90 days trading horizon Bakrie Sumatera Plantations is expected to generate 1.69 times more return on investment than Ace Oldfields. However, Bakrie Sumatera is 1.69 times more volatile than Ace Oldfields PT. It trades about 0.09 of its potential returns per unit of risk. Ace Oldfields PT is currently generating about -0.18 per unit of risk. If you would invest 11,100 in Bakrie Sumatera Plantations on August 30, 2024 and sell it today you would earn a total of 600.00 from holding Bakrie Sumatera Plantations or generate 5.41% 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. Ace Oldfields PT
Performance |
| Timeline |
| Bakrie Sumatera Plan |
| Ace Oldfields PT |
Bakrie Sumatera and Ace Oldfields Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Bakrie Sumatera and Ace Oldfields
The main advantage of trading using opposite Bakrie Sumatera and Ace Oldfields positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Bakrie Sumatera position performs unexpectedly, Ace Oldfields 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 Ace Oldfields will offset losses from the drop in Ace Oldfields' long position.| Bakrie Sumatera vs. Bakrieland Development Tbk | Bakrie Sumatera vs. Bakrie Brothers Tbk | Bakrie Sumatera vs. Energi Mega Persada | Bakrie Sumatera vs. Sampoerna Agro Tbk |
| Ace Oldfields vs. Ladangbaja Murni PT | Ace Oldfields vs. PT Hasnur Internasional | Ace Oldfields vs. Geoprima Solusi Tbk | Ace Oldfields vs. Prima Andalan Mandiri |
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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