Correlation Between Asuransi Jasa and Bakrie Brothers
Can any of the company-specific risk be diversified away by investing in both Asuransi Jasa and Bakrie Brothers 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 Asuransi Jasa and Bakrie Brothers into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Asuransi Jasa Tania and Bakrie Brothers Tbk, you can compare the effects of market volatilities on Asuransi Jasa and Bakrie Brothers 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 Asuransi Jasa with a short position of Bakrie Brothers. Check out your portfolio center. Please also check ongoing floating volatility patterns of Asuransi Jasa and Bakrie Brothers.
Diversification Opportunities for Asuransi Jasa and Bakrie Brothers
-0.13 | Correlation Coefficient |
Good diversification
The 3 months correlation between Asuransi and Bakrie is -0.13. Overlapping area represents the amount of risk that can be diversified away by holding Asuransi Jasa Tania and Bakrie Brothers Tbk in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Bakrie Brothers Tbk and Asuransi Jasa 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 Asuransi Jasa Tania are associated (or correlated) with Bakrie Brothers. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Bakrie Brothers Tbk has no effect on the direction of Asuransi Jasa i.e., Asuransi Jasa and Bakrie Brothers go up and down completely randomly.
Pair Corralation between Asuransi Jasa and Bakrie Brothers
Assuming the 90 days trading horizon Asuransi Jasa is expected to generate 8.83 times less return on investment than Bakrie Brothers. But when comparing it to its historical volatility, Asuransi Jasa Tania is 1.37 times less risky than Bakrie Brothers. It trades about 0.0 of its potential returns per unit of risk. Bakrie Brothers Tbk is currently generating about 0.02 of returns per unit of risk over similar time horizon. If you would invest 5,000 in Bakrie Brothers Tbk on January 18, 2024 and sell it today you would earn a total of 0.00 from holding Bakrie Brothers Tbk or generate 0.0% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 99.79% |
| Values | Daily Returns |
Asuransi Jasa Tania vs. Bakrie Brothers Tbk
Performance |
| Timeline |
| Asuransi Jasa Tania |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
| Bakrie Brothers Tbk |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
Asuransi Jasa and Bakrie Brothers Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Asuransi Jasa and Bakrie Brothers
The main advantage of trading using opposite Asuransi Jasa and Bakrie Brothers positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Asuransi Jasa position performs unexpectedly, Bakrie Brothers 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 Bakrie Brothers will offset losses from the drop in Bakrie Brothers' long position.The idea behind Asuransi Jasa Tania and Bakrie Brothers Tbk 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 Efficient Frontier module to plot and analyze your portfolio and positions against risk-return landscape of the market..
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