Correlation Between Bitcoin and PT Indo

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

By analyzing existing cross correlation between Bitcoin and PT Indo Boga, you can compare the effects of market volatilities on Bitcoin and PT Indo 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 Bitcoin with a short position of PT Indo. Check out your portfolio center. Please also check ongoing floating volatility patterns of Bitcoin and PT Indo.

Diversification Opportunities for Bitcoin and PT Indo

0.49

Correlation Coefficient

Bitcoin  PT Indo

Very weak diversification

The 3 months correlation between Bitcoin and IBOS is 0.49. Overlapping area represents the amount of risk that can be diversified away by holding Bitcoin and PT Indo Boga in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on PT Indo Boga and Bitcoin 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 Bitcoin are associated (or correlated) with PT Indo. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of PT Indo Boga has no effect on the direction of Bitcoin i.e., Bitcoin and PT Indo go up and down completely randomly.

Pair Corralation between Bitcoin and PT Indo

Assuming the 90 days trading horizon Bitcoin is expected to under-perform the PT Indo. But the crypto coin apears to be less risky and, when comparing its historical volatility, Bitcoin is 2.2 times less risky than PT Indo. The crypto coin trades about -0.09 of its potential returns per unit of risk. The PT Indo Boga is currently generating about 0.08 of returns per unit of risk over similar time horizon. If you would invest  2,700  in PT Indo Boga on December 21, 2024 and sell it today you would earn a total of  500.00  from holding PT Indo Boga or generate 18.52% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Weak
Accuracy	89.06%
Values	Daily Returns

Bitcoin  vs.  PT Indo Boga

Bitcoin

Risk-Adjusted Performance

Very Weak

Over the last 90 days Bitcoin has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of unsteady performance in the last few months, the Crypto's fundamental indicators remain rather sound which may send shares a bit higher in April 2025. The latest tumult may also be a sign of longer-term up-swing for Bitcoin shareholders.

PT Indo Boga

Risk-Adjusted Performance

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in PT Indo Boga are ranked lower than 6 (%) of all global equities and portfolios over the last 90 days. Despite quite conflicting forward-looking signals, PT Indo disclosed solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Bitcoin and PT Indo

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

The idea behind Bitcoin and PT Indo Boga 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.

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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 Price Transformation module to use Price Transformation models to analyze the depth of different equity instruments across global markets.