Correlation Between PT Trimuda and Blue Bird

Can any of the company-specific risk be diversified away by investing in both PT Trimuda and Blue Bird 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 Trimuda and Blue Bird into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between PT Trimuda Nuansa and Blue Bird Tbk, you can compare the effects of market volatilities on PT Trimuda and Blue Bird 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 Trimuda with a short position of Blue Bird. Check out your portfolio center. Please also check ongoing floating volatility patterns of PT Trimuda and Blue Bird.

Diversification Opportunities for PT Trimuda and Blue Bird

-0.17

Correlation Coefficient

PT Trimuda  Blue Bird

Good diversification

The 3 months correlation between TNCA and Blue is -0.17. Overlapping area represents the amount of risk that can be diversified away by holding PT Trimuda Nuansa and Blue Bird Tbk in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Blue Bird Tbk and PT Trimuda 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 Trimuda Nuansa are associated (or correlated) with Blue Bird. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Blue Bird Tbk has no effect on the direction of PT Trimuda i.e., PT Trimuda and Blue Bird go up and down completely randomly.

Pair Corralation between PT Trimuda and Blue Bird

Assuming the 90 days trading horizon PT Trimuda Nuansa is expected to under-perform the Blue Bird. In addition to that, PT Trimuda is 3.98 times more volatile than Blue Bird Tbk. It trades about -0.08 of its total potential returns per unit of risk. Blue Bird Tbk is currently generating about -0.05 per unit of volatility. If you would invest  186,500  in Blue Bird Tbk on September 17, 2024 and sell it today you would lose (13,500) from holding Blue Bird Tbk or give up 7.24% of portfolio value over 90 days.

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

PT Trimuda Nuansa  vs.  Blue Bird Tbk

PT Trimuda Nuansa

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days PT Trimuda Nuansa has generated negative risk-adjusted returns adding no value to investors with long positions. Despite conflicting performance in the last few months, the Stock's forward-looking signals remain quite persistent which may send shares a bit higher in January 2025. The latest mess may also be a sign of long-standing up-swing for the company institutional investors.

Blue Bird Tbk

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Blue Bird Tbk has generated negative risk-adjusted returns adding no value to investors with long positions. Despite quite persistent forward-looking signals, Blue Bird 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 PT Trimuda and Blue Bird

The main advantage of trading using opposite PT Trimuda and Blue Bird positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if PT Trimuda position performs unexpectedly, Blue Bird 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 Blue Bird will offset losses from the drop in Blue Bird's long position.

The idea behind PT Trimuda Nuansa and Blue Bird 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 Portfolio Volatility module to check portfolio volatility and analyze historical return density to properly model market risk.