Correlation Between Bakrie Sumatera and Trimitra Propertindo
Can any of the company-specific risk be diversified away by investing in both Bakrie Sumatera and Trimitra Propertindo 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 Trimitra Propertindo 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 Trimitra Propertindo Tbk, you can compare the effects of market volatilities on Bakrie Sumatera and Trimitra Propertindo 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 Trimitra Propertindo. Check out your portfolio center. Please also check ongoing floating volatility patterns of Bakrie Sumatera and Trimitra Propertindo.
Diversification Opportunities for Bakrie Sumatera and Trimitra Propertindo
0.02 | Correlation Coefficient |
Significant diversification
The 3 months correlation between Bakrie and Trimitra is 0.02. Overlapping area represents the amount of risk that can be diversified away by holding Bakrie Sumatera Plantations and Trimitra Propertindo Tbk in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Trimitra Propertindo Tbk 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 Trimitra Propertindo. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Trimitra Propertindo Tbk has no effect on the direction of Bakrie Sumatera i.e., Bakrie Sumatera and Trimitra Propertindo go up and down completely randomly.
Pair Corralation between Bakrie Sumatera and Trimitra Propertindo
Assuming the 90 days trading horizon Bakrie Sumatera Plantations is expected to under-perform the Trimitra Propertindo. But the stock apears to be less risky and, when comparing its historical volatility, Bakrie Sumatera Plantations is 1.11 times less risky than Trimitra Propertindo. The stock trades about -0.2 of its potential returns per unit of risk. The Trimitra Propertindo Tbk is currently generating about -0.08 of returns per unit of risk over similar time horizon. If you would invest 1,600 in Trimitra Propertindo Tbk on November 28, 2024 and sell it today you would lose (100.00) from holding Trimitra Propertindo Tbk or give up 6.25% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Bakrie Sumatera Plantations vs. Trimitra Propertindo Tbk
Performance |
| Timeline |
| Bakrie Sumatera Plan |
| Trimitra Propertindo Tbk |
Bakrie Sumatera and Trimitra Propertindo Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Bakrie Sumatera and Trimitra Propertindo
The main advantage of trading using opposite Bakrie Sumatera and Trimitra Propertindo positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Bakrie Sumatera position performs unexpectedly, Trimitra Propertindo 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 Trimitra Propertindo will offset losses from the drop in Trimitra Propertindo's 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 |
| Trimitra Propertindo vs. Jaya Sukses Makmur | Trimitra Propertindo vs. Mahkota Group Tbk | Trimitra Propertindo vs. Pollux Properti Indonesia | Trimitra Propertindo vs. Kioson Komersial Indonesia |
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 Risk-Return Analysis module to view associations between returns expected from investment and the risk you assume.
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