Correlation Between BAKRIE SUMATERA and Diageo Plc

Can any of the company-specific risk be diversified away by investing in both BAKRIE SUMATERA and Diageo Plc 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 BAKRIE SUMATERA and Diageo Plc into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between BAKRIE SUMATERA PL and Diageo plc, you can compare the effects of market volatilities on BAKRIE SUMATERA and Diageo Plc 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 BAKRIE SUMATERA with a short position of Diageo Plc. Check out your portfolio center. Please also check ongoing floating volatility patterns of BAKRIE SUMATERA and Diageo Plc.

Diversification Opportunities for BAKRIE SUMATERA and Diageo Plc

0.0

Correlation Coefficient

BAKRIE SUMATERA  Diageo Plc

Pay attention - limited upside

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

Pair Corralation between BAKRIE SUMATERA and Diageo Plc

If you would invest (100.00) in BAKRIE SUMATERA PL on April 20, 2025 and sell it today you would earn a total of  100.00  from holding BAKRIE SUMATERA PL or generate -100.0% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Flat
Strength	Insignificant
Accuracy	0.0%
Values	Daily Returns

BAKRIE SUMATERA PL  vs.  Diageo plc

BAKRIE SUMATERA PL

Risk-Adjusted Performance

Good

Over the last 90 days BAKRIE SUMATERA PL has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of comparatively stable basic indicators, BAKRIE SUMATERA is not utilizing all of its potentials. The current stock price uproar, may contribute to short-horizon losses for the private investors.

Diageo plc

Risk-Adjusted Performance

Very Weak

Over the last 90 days Diageo plc has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of latest fragile performance, the Stock's forward indicators remain stable and the newest uproar on Wall Street may also be a sign of mid-term gains for the firm private investors.

Pair Trading with BAKRIE SUMATERA and Diageo Plc

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

The idea behind BAKRIE SUMATERA PL and Diageo plc 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 Insider Screener module to find insiders across different sectors to evaluate their impact on performance.