Correlation Between Alumindo Light and PT Data
Can any of the company-specific risk be diversified away by investing in both Alumindo Light and PT Data 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 Alumindo Light and PT Data into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Alumindo Light Metal and PT Data Sinergitama, you can compare the effects of market volatilities on Alumindo Light and PT Data 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 Alumindo Light with a short position of PT Data. Check out your portfolio center. Please also check ongoing floating volatility patterns of Alumindo Light and PT Data.
Diversification Opportunities for Alumindo Light and PT Data
0.23 | Correlation Coefficient |
Modest diversification
The 3 months correlation between Alumindo and ELIT is 0.23. Overlapping area represents the amount of risk that can be diversified away by holding Alumindo Light Metal and PT Data Sinergitama in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on PT Data Sinergitama and Alumindo Light 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 Alumindo Light Metal are associated (or correlated) with PT Data. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of PT Data Sinergitama has no effect on the direction of Alumindo Light i.e., Alumindo Light and PT Data go up and down completely randomly.
Pair Corralation between Alumindo Light and PT Data
Assuming the 90 days trading horizon Alumindo Light Metal is expected to generate 0.93 times more return on investment than PT Data. However, Alumindo Light Metal is 1.08 times less risky than PT Data. It trades about 0.11 of its potential returns per unit of risk. PT Data Sinergitama is currently generating about 0.04 per unit of risk. If you would invest 6,500 in Alumindo Light Metal on September 3, 2024 and sell it today you would earn a total of 900.00 from holding Alumindo Light Metal or generate 13.85% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 97.62% |
| Values | Daily Returns |
Alumindo Light Metal vs. PT Data Sinergitama
Performance |
| Timeline |
| Alumindo Light Metal |
| PT Data Sinergitama |
Alumindo Light and PT Data Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Alumindo Light and PT Data
The main advantage of trading using opposite Alumindo Light and PT Data positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Alumindo Light position performs unexpectedly, PT Data 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 PT Data will offset losses from the drop in PT Data's long position.| Alumindo Light vs. Timah Persero Tbk | Alumindo Light vs. Semen Indonesia Persero | Alumindo Light vs. Mitra Pinasthika Mustika | Alumindo Light vs. Jakarta Int Hotels |
| PT Data vs. Indointernet Tbk PT | PT Data vs. Multipolar Technology Tbk | PT Data vs. Indosterling Technomedia Tbk | PT Data vs. PT Techno9 Indonesia |
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 ETFs module to find actively traded Exchange Traded Funds (ETF) from around the world.
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