Correlation Between Asuransi Harta and Tirta Mahakam
Can any of the company-specific risk be diversified away by investing in both Asuransi Harta and Tirta Mahakam 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 Tirta Mahakam 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 Tirta Mahakam Resources, you can compare the effects of market volatilities on Asuransi Harta and Tirta Mahakam 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 Tirta Mahakam. Check out your portfolio center. Please also check ongoing floating volatility patterns of Asuransi Harta and Tirta Mahakam.
Diversification Opportunities for Asuransi Harta and Tirta Mahakam
0.32 | Correlation Coefficient |
Weak diversification
The 3 months correlation between Asuransi and Tirta is 0.32. Overlapping area represents the amount of risk that can be diversified away by holding Asuransi Harta Aman and Tirta Mahakam Resources in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Tirta Mahakam Resources 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 Tirta Mahakam. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Tirta Mahakam Resources has no effect on the direction of Asuransi Harta i.e., Asuransi Harta and Tirta Mahakam go up and down completely randomly.
Pair Corralation between Asuransi Harta and Tirta Mahakam
Assuming the 90 days trading horizon Asuransi Harta Aman is expected to under-perform the Tirta Mahakam. But the stock apears to be less risky and, when comparing its historical volatility, Asuransi Harta Aman is 3.45 times less risky than Tirta Mahakam. The stock trades about -0.04 of its potential returns per unit of risk. The Tirta Mahakam Resources is currently generating about 0.37 of returns per unit of risk over similar time horizon. If you would invest 2,400 in Tirta Mahakam Resources on September 6, 2024 and sell it today you would earn a total of 1,600 from holding Tirta Mahakam Resources or generate 66.67% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Asuransi Harta Aman vs. Tirta Mahakam Resources
Performance |
| Timeline |
| Asuransi Harta Aman |
| Tirta Mahakam Resources |
Asuransi Harta and Tirta Mahakam Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Asuransi Harta and Tirta Mahakam
The main advantage of trading using opposite Asuransi Harta and Tirta Mahakam positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Asuransi Harta position performs unexpectedly, Tirta Mahakam 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 Tirta Mahakam will offset losses from the drop in Tirta Mahakam'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 |
| Tirta Mahakam vs. Slj Global Tbk | Tirta Mahakam vs. Indo Acidatama Tbk | Tirta Mahakam vs. Trias Sentosa Tbk | Tirta Mahakam vs. Suparma Tbk |
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 Watchlist Optimization module to optimize watchlists to build efficient portfolios or rebalance existing positions based on the mean-variance optimization algorithm.
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