Correlation Between PT Barito and Gateway Real

Can any of the company-specific risk be diversified away by investing in both PT Barito and Gateway Real 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 Gateway Real 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 Gateway Real Estate, you can compare the effects of market volatilities on PT Barito and Gateway Real 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 Gateway Real. Check out your portfolio center. Please also check ongoing floating volatility patterns of PT Barito and Gateway Real.

Diversification Opportunities for PT Barito and Gateway Real

0.69

Correlation Coefficient

PT Barito  Gateway Real

Poor diversification

The 3 months correlation between OB8 and Gateway is 0.69. Overlapping area represents the amount of risk that can be diversified away by holding PT Barito Pacific and Gateway Real Estate in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Gateway Real Estate 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 Gateway Real. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Gateway Real Estate has no effect on the direction of PT Barito i.e., PT Barito and Gateway Real go up and down completely randomly.

Pair Corralation between PT Barito and Gateway Real

Assuming the 90 days horizon PT Barito Pacific is expected to generate 0.93 times more return on investment than Gateway Real. However, PT Barito Pacific is 1.08 times less risky than Gateway Real. It trades about 0.01 of its potential returns per unit of risk. Gateway Real Estate is currently generating about -0.09 per unit of risk. If you would invest  5.00  in PT Barito Pacific on October 5, 2024 and sell it today you would lose (0.45) from holding PT Barito Pacific or give up 9.0% of portfolio value over 90 days.

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

PT Barito Pacific  vs.  Gateway Real Estate

PT Barito Pacific

Risk-Adjusted Performance

0 of 100

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 nearly stable basic indicators, PT Barito is not utilizing all of its potentials. The newest stock price disturbance, may contribute to mid-run losses for the stockholders.

Gateway Real Estate

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Gateway Real Estate has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of uncertain performance in the last few months, the Stock's basic indicators remain comparatively stable which may send shares a bit higher in February 2025. The newest uproar may also be a sign of mid-term up-swing for the firm private investors.

Pair Trading with PT Barito and Gateway Real

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

The idea behind PT Barito Pacific and Gateway Real Estate 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 Portfolio Holdings module to check your current holdings and cash postion to detemine if your portfolio needs rebalancing.