Correlation Between PT Indonesia and Buana Listya
Can any of the company-specific risk be diversified away by investing in both PT Indonesia and Buana Listya 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 PT Indonesia and Buana Listya into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between PT Indonesia Kendaraan and Buana Listya Tama, you can compare the effects of market volatilities on PT Indonesia and Buana Listya 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 PT Indonesia with a short position of Buana Listya. Check out your portfolio center. Please also check ongoing floating volatility patterns of PT Indonesia and Buana Listya.
Diversification Opportunities for PT Indonesia and Buana Listya
-0.7 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between IPCC and Buana is -0.7. Overlapping area represents the amount of risk that can be diversified away by holding PT Indonesia Kendaraan and Buana Listya Tama in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Buana Listya Tama and PT Indonesia 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 PT Indonesia Kendaraan are associated (or correlated) with Buana Listya. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Buana Listya Tama has no effect on the direction of PT Indonesia i.e., PT Indonesia and Buana Listya go up and down completely randomly.
Pair Corralation between PT Indonesia and Buana Listya
Assuming the 90 days trading horizon PT Indonesia Kendaraan is expected to generate 0.4 times more return on investment than Buana Listya. However, PT Indonesia Kendaraan is 2.51 times less risky than Buana Listya. It trades about 0.1 of its potential returns per unit of risk. Buana Listya Tama is currently generating about 0.01 per unit of risk. If you would invest 65,709 in PT Indonesia Kendaraan on September 18, 2024 and sell it today you would earn a total of 5,291 from holding PT Indonesia Kendaraan or generate 8.05% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Against |
Strength | Weak |
Accuracy | 100.0% |
Values | Daily Returns |
PT Indonesia Kendaraan vs. Buana Listya Tama
Performance |
Timeline |
PT Indonesia Kendaraan |
Buana Listya Tama |
PT Indonesia and Buana Listya Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with PT Indonesia and Buana Listya
The main advantage of trading using opposite PT Indonesia and Buana Listya positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if PT Indonesia position performs unexpectedly, Buana Listya 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 Buana Listya will offset losses from the drop in Buana Listya's long position.PT Indonesia vs. Jasa Armada Indonesia | PT Indonesia vs. Cikarang Listrindo Tbk | PT Indonesia vs. Mitra Pinasthika Mustika | PT Indonesia vs. Wijaya Karya Bangunan |
Buana Listya vs. PT Indonesia Kendaraan | Buana Listya vs. Surya Toto Indonesia | Buana Listya vs. Mitra Pinasthika Mustika | Buana Listya vs. Integra Indocabinet Tbk |
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 Bond Analysis module to evaluate and analyze corporate bonds as a potential investment for your portfolios..
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