Correlation Between Blue Bird and Inti Bangun

Can any of the company-specific risk be diversified away by investing in both Blue Bird and Inti Bangun 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 Blue Bird and Inti Bangun into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Blue Bird Tbk and Inti Bangun Sejahtera, you can compare the effects of market volatilities on Blue Bird and Inti Bangun 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 Blue Bird with a short position of Inti Bangun. Check out your portfolio center. Please also check ongoing floating volatility patterns of Blue Bird and Inti Bangun.

Diversification Opportunities for Blue Bird and Inti Bangun

-0.21

Correlation Coefficient

Blue Bird  Inti Bangun

Very good diversification

The 3 months correlation between Blue and Inti is -0.21. Overlapping area represents the amount of risk that can be diversified away by holding Blue Bird Tbk and Inti Bangun Sejahtera in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Inti Bangun Sejahtera and Blue Bird 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 Blue Bird Tbk are associated (or correlated) with Inti Bangun. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Inti Bangun Sejahtera has no effect on the direction of Blue Bird i.e., Blue Bird and Inti Bangun go up and down completely randomly.

Pair Corralation between Blue Bird and Inti Bangun

Assuming the 90 days trading horizon Blue Bird Tbk is expected to generate 1.0 times more return on investment than Inti Bangun. However, Blue Bird Tbk is 1.0 times less risky than Inti Bangun. It trades about 0.02 of its potential returns per unit of risk. Inti Bangun Sejahtera is currently generating about 0.0 per unit of risk. If you would invest  132,521  in Blue Bird Tbk on October 12, 2024 and sell it today you would earn a total of  17,479  from holding Blue Bird Tbk or generate 13.19% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Insignificant
Accuracy	99.79%
Values	Daily Returns

Blue Bird Tbk  vs.  Inti Bangun Sejahtera

Blue Bird Tbk

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Blue Bird Tbk has generated negative risk-adjusted returns adding no value to investors with long positions. Despite conflicting performance in the last few months, the Stock's forward-looking signals remain quite persistent which may send shares a bit higher in February 2025. The latest mess may also be a sign of long-standing up-swing for the company institutional investors.

Inti Bangun Sejahtera

Risk-Adjusted Performance

9 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Inti Bangun Sejahtera are ranked lower than 9 (%) of all global equities and portfolios over the last 90 days. Despite quite conflicting forward-looking signals, Inti Bangun disclosed solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Blue Bird and Inti Bangun

The main advantage of trading using opposite Blue Bird and Inti Bangun positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Blue Bird position performs unexpectedly, Inti Bangun 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 Inti Bangun will offset losses from the drop in Inti Bangun's long position.

The idea behind Blue Bird Tbk and Inti Bangun Sejahtera pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.

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 Volatility module to check portfolio volatility and analyze historical return density to properly model market risk.