Correlation Between Integra Indocabinet and Bhakti Multi
Can any of the company-specific risk be diversified away by investing in both Integra Indocabinet and Bhakti Multi 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 Integra Indocabinet and Bhakti Multi into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Integra Indocabinet Tbk and Bhakti Multi Artha, you can compare the effects of market volatilities on Integra Indocabinet and Bhakti Multi 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 Integra Indocabinet with a short position of Bhakti Multi. Check out your portfolio center. Please also check ongoing floating volatility patterns of Integra Indocabinet and Bhakti Multi.
Diversification Opportunities for Integra Indocabinet and Bhakti Multi
-0.31 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Integra and Bhakti is -0.31. Overlapping area represents the amount of risk that can be diversified away by holding Integra Indocabinet Tbk and Bhakti Multi Artha in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Bhakti Multi Artha and Integra Indocabinet 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 Integra Indocabinet Tbk are associated (or correlated) with Bhakti Multi. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Bhakti Multi Artha has no effect on the direction of Integra Indocabinet i.e., Integra Indocabinet and Bhakti Multi go up and down completely randomly.
Pair Corralation between Integra Indocabinet and Bhakti Multi
Assuming the 90 days trading horizon Integra Indocabinet Tbk is expected to generate 1.1 times more return on investment than Bhakti Multi. However, Integra Indocabinet is 1.1 times more volatile than Bhakti Multi Artha. It trades about -0.21 of its potential returns per unit of risk. Bhakti Multi Artha is currently generating about -0.34 per unit of risk. If you would invest 32,600 in Integra Indocabinet Tbk on August 25, 2024 and sell it today you would lose (3,200) from holding Integra Indocabinet Tbk or give up 9.82% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 95.65% |
| Values | Daily Returns |
Integra Indocabinet Tbk vs. Bhakti Multi Artha
Performance |
| Timeline |
| Integra Indocabinet Tbk |
| Bhakti Multi Artha |
Integra Indocabinet and Bhakti Multi Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Integra Indocabinet and Bhakti Multi
The main advantage of trading using opposite Integra Indocabinet and Bhakti Multi positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Integra Indocabinet position performs unexpectedly, Bhakti Multi 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 Bhakti Multi will offset losses from the drop in Bhakti Multi's long position.| Integra Indocabinet vs. Buyung Poetra Sembada | Integra Indocabinet vs. Erajaya Swasembada Tbk | Integra Indocabinet vs. Sariguna Primatirta PT | Integra Indocabinet vs. Puradelta Lestari PT |
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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 ETF Categories module to list of ETF categories grouped based on various criteria, such as the investment strategy or type of investments.
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