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

-0.09

Correlation Coefficient

Asuransi Jasa  Bakrie Brothers

Good diversification

The 3 months correlation between Asuransi and Bakrie is -0.09. 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

If you would invest  11,500  in Asuransi Jasa Tania on January 31, 2024 and sell it today you would earn a total of  0.00  from holding Asuransi Jasa Tania or generate 0.0% return on investment over 90 days.

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

Asuransi Jasa Tania  vs.  Bakrie Brothers Tbk

Asuransi Jasa Tania

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Asuransi Jasa Tania has generated negative risk-adjusted returns adding no value to investors with long positions. Despite quite persistent basic indicators, Asuransi Jasa is not utilizing all of its potentials. The latest stock price mess, may contribute to short-term losses for the institutional investors.

Bakrie Brothers Tbk

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Bakrie Brothers Tbk has generated negative risk-adjusted returns adding no value to investors with long positions. Despite quite persistent basic indicators, Bakrie Brothers is not utilizing all of its potentials. The latest stock price mess, may contribute to short-term losses for the institutional investors.

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.

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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 Exposure Probability module to analyze equity upside and downside potential for a given time horizon across multiple markets.