Correlation Between Akbar Indomakmur and Intanwijaya Internasional
Can any of the company-specific risk be diversified away by investing in both Akbar Indomakmur and Intanwijaya Internasional 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 Akbar Indomakmur and Intanwijaya Internasional into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Akbar Indomakmur Stimec and Intanwijaya Internasional Tbk, you can compare the effects of market volatilities on Akbar Indomakmur and Intanwijaya Internasional 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 Akbar Indomakmur with a short position of Intanwijaya Internasional. Check out your portfolio center. Please also check ongoing floating volatility patterns of Akbar Indomakmur and Intanwijaya Internasional.
Diversification Opportunities for Akbar Indomakmur and Intanwijaya Internasional
0.17 | Correlation Coefficient |
Average diversification
The 3 months correlation between Akbar and Intanwijaya is 0.17. Overlapping area represents the amount of risk that can be diversified away by holding Akbar Indomakmur Stimec and Intanwijaya Internasional Tbk in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Intanwijaya Internasional and Akbar Indomakmur 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 Akbar Indomakmur Stimec are associated (or correlated) with Intanwijaya Internasional. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Intanwijaya Internasional has no effect on the direction of Akbar Indomakmur i.e., Akbar Indomakmur and Intanwijaya Internasional go up and down completely randomly.
Pair Corralation between Akbar Indomakmur and Intanwijaya Internasional
Assuming the 90 days trading horizon Akbar Indomakmur Stimec is expected to generate 3.01 times more return on investment than Intanwijaya Internasional. However, Akbar Indomakmur is 3.01 times more volatile than Intanwijaya Internasional Tbk. It trades about 0.05 of its potential returns per unit of risk. Intanwijaya Internasional Tbk is currently generating about 0.0 per unit of risk. If you would invest 21,800 in Akbar Indomakmur Stimec on September 4, 2024 and sell it today you would earn a total of 22,800 from holding Akbar Indomakmur Stimec or generate 104.59% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Akbar Indomakmur Stimec vs. Intanwijaya Internasional Tbk
Performance |
| Timeline |
| Akbar Indomakmur Stimec |
| Intanwijaya Internasional |
Akbar Indomakmur and Intanwijaya Internasional Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Akbar Indomakmur and Intanwijaya Internasional
The main advantage of trading using opposite Akbar Indomakmur and Intanwijaya Internasional positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Akbar Indomakmur position performs unexpectedly, Intanwijaya Internasional 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 Intanwijaya Internasional will offset losses from the drop in Intanwijaya Internasional's long position.| Akbar Indomakmur vs. Bayu Buana Tbk | Akbar Indomakmur vs. Alakasa Industrindo Tbk | Akbar Indomakmur vs. Mahaka Media Tbk | Akbar Indomakmur vs. Arthavest 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 Aroon Oscillator module to analyze current equity momentum using Aroon Oscillator and other momentum ratios.
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