Correlation Between PT Indosat and BBQ Holdings

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Can any of the company-specific risk be diversified away by investing in both PT Indosat and BBQ Holdings 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 Indosat and BBQ Holdings into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between PT Indosat Tbk and BBQ Holdings, you can compare the effects of market volatilities on PT Indosat and BBQ Holdings 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 Indosat with a short position of BBQ Holdings. Check out your portfolio center. Please also check ongoing floating volatility patterns of PT Indosat and BBQ Holdings.

Diversification Opportunities for PT Indosat and BBQ Holdings

0.0
  Correlation Coefficient

Pay attention - limited upside

The 3 months correlation between PTITF and BBQ is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding PT Indosat Tbk and BBQ Holdings in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on BBQ Holdings and PT Indosat 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 Indosat Tbk are associated (or correlated) with BBQ Holdings. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of BBQ Holdings has no effect on the direction of PT Indosat i.e., PT Indosat and BBQ Holdings go up and down completely randomly.

Pair Corralation between PT Indosat and BBQ Holdings

If you would invest  62.00  in PT Indosat Tbk on January 24, 2024 and sell it today you would earn a total of  10.00  from holding PT Indosat Tbk or generate 16.13% return on investment over 90 days.
Time Period3 Months [change]
DirectionFlat 
StrengthInsignificant
Accuracy5.0%
ValuesDaily Returns

PT Indosat Tbk  vs.  BBQ Holdings

 Performance 
       Timeline  
PT Indosat Tbk 

Risk-Adjusted Performance

9 of 100

 
Weak
 
Strong
OK
Compared to the overall equity markets, risk-adjusted returns on investments in PT Indosat Tbk are ranked lower than 9 (%) of all global equities and portfolios over the last 90 days. Despite nearly weak basic indicators, PT Indosat reported solid returns over the last few months and may actually be approaching a breakup point.
BBQ Holdings 

Risk-Adjusted Performance

0 of 100

 
Weak
 
Strong
Very Weak
Over the last 90 days BBQ Holdings has generated negative risk-adjusted returns adding no value to investors with long positions. Even with relatively invariable fundamental drivers, BBQ Holdings is not utilizing all of its potentials. The current stock price agitation, may contribute to short-term losses for the retail investors.

PT Indosat and BBQ Holdings Volatility Contrast

   Predicted Return Density   
       Returns  

Pair Trading with PT Indosat and BBQ Holdings

The main advantage of trading using opposite PT Indosat and BBQ Holdings positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if PT Indosat position performs unexpectedly, BBQ Holdings 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 BBQ Holdings will offset losses from the drop in BBQ Holdings' long position.
The idea behind PT Indosat Tbk and BBQ Holdings 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 Money Flow Index module to determine momentum by analyzing Money Flow Index and other technical indicators.

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