Correlation Between Pelangi Indah and Barito Pacific
Can any of the company-specific risk be diversified away by investing in both Pelangi Indah and Barito Pacific 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 Pelangi Indah and Barito Pacific into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Pelangi Indah Canindo and Barito Pacific Tbk, you can compare the effects of market volatilities on Pelangi Indah and Barito Pacific 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 Pelangi Indah with a short position of Barito Pacific. Check out your portfolio center. Please also check ongoing floating volatility patterns of Pelangi Indah and Barito Pacific.
Diversification Opportunities for Pelangi Indah and Barito Pacific
0.48 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Pelangi and Barito is 0.48. Overlapping area represents the amount of risk that can be diversified away by holding Pelangi Indah Canindo and Barito Pacific Tbk in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Barito Pacific Tbk and Pelangi Indah 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 Pelangi Indah Canindo are associated (or correlated) with Barito Pacific. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Barito Pacific Tbk has no effect on the direction of Pelangi Indah i.e., Pelangi Indah and Barito Pacific go up and down completely randomly.
Pair Corralation between Pelangi Indah and Barito Pacific
Assuming the 90 days trading horizon Pelangi Indah Canindo is expected to under-perform the Barito Pacific. But the stock apears to be less risky and, when comparing its historical volatility, Pelangi Indah Canindo is 1.28 times less risky than Barito Pacific. The stock trades about -0.08 of its potential returns per unit of risk. The Barito Pacific Tbk is currently generating about 0.03 of returns per unit of risk over similar time horizon. If you would invest 83,325 in Barito Pacific Tbk on December 29, 2023 and sell it today you would earn a total of 11,675 from holding Barito Pacific Tbk or generate 14.01% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Together |
Strength | Weak |
Accuracy | 99.28% |
Values | Daily Returns |
Pelangi Indah Canindo vs. Barito Pacific Tbk
Performance |
Timeline |
Pelangi Indah Canindo |
Barito Pacific Tbk |
Pelangi Indah and Barito Pacific Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Pelangi Indah and Barito Pacific
The main advantage of trading using opposite Pelangi Indah and Barito Pacific positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Pelangi Indah position performs unexpectedly, Barito Pacific 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 Barito Pacific will offset losses from the drop in Barito Pacific's long position.Pelangi Indah vs. Fast Food Indonesia | Pelangi Indah vs. Ciptadana Asset Management | Pelangi Indah vs. Galva Technologies Tbk | Pelangi Indah vs. Electronic City Indonesia |
Barito Pacific vs. Surya Citra Media | Barito Pacific vs. Lion Metal Works | Barito Pacific vs. Dyandra Media International | Barito Pacific vs. Alumindo Light Metal |
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 Volatility Analysis module to get historical volatility and risk analysis based on latest market data.
Other Complementary Tools
Equity Forecasting Use basic forecasting models to generate price predictions and determine price momentum | |
Portfolio Comparator Compare the composition, asset allocations and performance of any two portfolios in your account | |
Analyst Advice Analyst recommendations and target price estimates broken down by several categories | |
Balance Of Power Check stock momentum by analyzing Balance Of Power indicator and other technical ratios | |
Portfolio File Import Quickly import all of your third-party portfolios from your local drive in csv format | |
Content Syndication Quickly integrate customizable finance content to your own investment portal | |
Instant Ratings Determine any equity ratings based on digital recommendations. Macroaxis instant equity ratings are based on combination of fundamental analysis and risk-adjusted market performance | |
Idea Analyzer Analyze all characteristics, volatility and risk-adjusted return of Macroaxis ideas | |
Latest Portfolios Quick portfolio dashboard that showcases your latest portfolios | |
Equity Search Search for actively traded equities including funds and ETFs from over 30 global markets |