Correlation Between PT Barito and Qingdao Port

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

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

Diversification Opportunities for PT Barito and Qingdao Port

0.54

Correlation Coefficient

PT Barito  Qingdao Port

Very weak diversification

The 3 months correlation between OB8 and Qingdao is 0.54. Overlapping area represents the amount of risk that can be diversified away by holding PT Barito Pacific and Qingdao Port International in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Qingdao Port Interna and PT Barito 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 Barito Pacific are associated (or correlated) with Qingdao Port. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Qingdao Port Interna has no effect on the direction of PT Barito i.e., PT Barito and Qingdao Port go up and down completely randomly.

Pair Corralation between PT Barito and Qingdao Port

Assuming the 90 days horizon PT Barito Pacific is expected to under-perform the Qingdao Port. In addition to that, PT Barito is 3.58 times more volatile than Qingdao Port International. It trades about -0.1 of its total potential returns per unit of risk. Qingdao Port International is currently generating about -0.04 per unit of volatility. If you would invest  72.00  in Qingdao Port International on December 21, 2024 and sell it today you would lose (3.00) from holding Qingdao Port International or give up 4.17% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Weak
Accuracy	100.0%
Values	Daily Returns

PT Barito Pacific  vs.  Qingdao Port International

PT Barito Pacific

Risk-Adjusted Performance

Very Weak

Over the last 90 days PT Barito Pacific has generated negative risk-adjusted returns adding no value to investors with long positions. Despite fragile performance in the last few months, the Stock's basic indicators remain nearly stable which may send shares a bit higher in April 2025. The current disturbance may also be a sign of long-run up-swing for the company stockholders.

Qingdao Port Interna

Risk-Adjusted Performance

Very Weak

Over the last 90 days Qingdao Port International has generated negative risk-adjusted returns adding no value to investors with long positions. Despite nearly stable basic indicators, Qingdao Port is not utilizing all of its potentials. The current stock price disturbance, may contribute to mid-run losses for the stockholders.

Pair Trading with PT Barito and Qingdao Port

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

The idea behind PT Barito Pacific and Qingdao Port International 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 Holdings module to check your current holdings and cash postion to detemine if your portfolio needs rebalancing.