Correlation Between Asuransi Harta and Red Planet
Can any of the company-specific risk be diversified away by investing in both Asuransi Harta and Red Planet 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 Asuransi Harta and Red Planet into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Asuransi Harta Aman and Red Planet Indonesia, you can compare the effects of market volatilities on Asuransi Harta and Red Planet 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 Asuransi Harta with a short position of Red Planet. Check out your portfolio center. Please also check ongoing floating volatility patterns of Asuransi Harta and Red Planet.
Diversification Opportunities for Asuransi Harta and Red Planet
-0.23 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Asuransi and Red is -0.23. Overlapping area represents the amount of risk that can be diversified away by holding Asuransi Harta Aman and Red Planet Indonesia in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Red Planet Indonesia and Asuransi Harta 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 Asuransi Harta Aman are associated (or correlated) with Red Planet. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Red Planet Indonesia has no effect on the direction of Asuransi Harta i.e., Asuransi Harta and Red Planet go up and down completely randomly.
Pair Corralation between Asuransi Harta and Red Planet
Assuming the 90 days trading horizon Asuransi Harta Aman is expected to generate 1.75 times more return on investment than Red Planet. However, Asuransi Harta is 1.75 times more volatile than Red Planet Indonesia. It trades about 0.05 of its potential returns per unit of risk. Red Planet Indonesia is currently generating about -0.02 per unit of risk. If you would invest 5,500 in Asuransi Harta Aman on September 4, 2024 and sell it today you would earn a total of 3,800 from holding Asuransi Harta Aman or generate 69.09% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Asuransi Harta Aman vs. Red Planet Indonesia
Performance |
| Timeline |
| Asuransi Harta Aman |
| Red Planet Indonesia |
Asuransi Harta and Red Planet Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Asuransi Harta and Red Planet
The main advantage of trading using opposite Asuransi Harta and Red Planet positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Asuransi Harta position performs unexpectedly, Red Planet 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 Red Planet will offset losses from the drop in Red Planet's long position.| Asuransi Harta vs. Asuransi Bintang Tbk | Asuransi Harta vs. Asuransi Bina Dana | Asuransi Harta vs. Asuransi Dayin Mitra | Asuransi Harta vs. Asuransi Jasa Tania |
| Red Planet vs. Pembangunan Graha Lestari | Red Planet vs. Pudjiadi Sons Tbk | Red Planet vs. Pioneerindo Gourmet International | Red Planet vs. Pembangunan Jaya Ancol |
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 Price Exposure Probability module to analyze equity upside and downside potential for a given time horizon across multiple markets.
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