Correlation Between PT Barito and Amphenol

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

Diversification Opportunities for PT Barito and Amphenol

-0.84
  Correlation Coefficient

Pay attention - limited upside

The 3 months correlation between OB8 and Amphenol is -0.84. Overlapping area represents the amount of risk that can be diversified away by holding PT Barito Pacific and Amphenol in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Amphenol 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 Amphenol. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Amphenol has no effect on the direction of PT Barito i.e., PT Barito and Amphenol go up and down completely randomly.

Pair Corralation between PT Barito and Amphenol

Assuming the 90 days horizon PT Barito Pacific is expected to under-perform the Amphenol. In addition to that, PT Barito is 4.85 times more volatile than Amphenol. It trades about -0.02 of its total potential returns per unit of risk. Amphenol is currently generating about 0.23 per unit of volatility. If you would invest  5,553  in Amphenol on September 5, 2024 and sell it today you would earn a total of  1,369  from holding Amphenol or generate 24.65% return on investment over 90 days.
Time Period3 Months [change]
DirectionMoves Against 
StrengthSignificant
Accuracy100.0%
ValuesDaily Returns

PT Barito Pacific  vs.  Amphenol

 Performance 
       Timeline  
PT Barito Pacific 

Risk-Adjusted Performance

0 of 100

 
Weak
 
Strong
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 latest fragile performance, the Stock's basic indicators remain stable and the current disturbance on Wall Street may also be a sign of long-run gains for the company stockholders.
Amphenol 

Risk-Adjusted Performance

18 of 100

 
Weak
 
Strong
Solid
Compared to the overall equity markets, risk-adjusted returns on investments in Amphenol are ranked lower than 18 (%) of all global equities and portfolios over the last 90 days. Despite nearly uncertain basic indicators, Amphenol reported solid returns over the last few months and may actually be approaching a breakup point.

PT Barito and Amphenol Volatility Contrast

   Predicted Return Density   
       Returns  

Pair Trading with PT Barito and Amphenol

The main advantage of trading using opposite PT Barito and Amphenol positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if PT Barito position performs unexpectedly, Amphenol 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 Amphenol will offset losses from the drop in Amphenol's long position.
The idea behind PT Barito Pacific and Amphenol 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 Global Correlations module to find global opportunities by holding instruments from different markets.

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