Correlation Between Trimitra Prawara and Indorama Synthetics
Can any of the company-specific risk be diversified away by investing in both Trimitra Prawara and Indorama Synthetics 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 Trimitra Prawara and Indorama Synthetics into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Trimitra Prawara Goldland and Indorama Synthetics Tbk, you can compare the effects of market volatilities on Trimitra Prawara and Indorama Synthetics 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 Trimitra Prawara with a short position of Indorama Synthetics. Check out your portfolio center. Please also check ongoing floating volatility patterns of Trimitra Prawara and Indorama Synthetics.
Diversification Opportunities for Trimitra Prawara and Indorama Synthetics
0.43 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Trimitra and Indorama is 0.43. Overlapping area represents the amount of risk that can be diversified away by holding Trimitra Prawara Goldland and Indorama Synthetics Tbk in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Indorama Synthetics Tbk and Trimitra Prawara 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 Trimitra Prawara Goldland are associated (or correlated) with Indorama Synthetics. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Indorama Synthetics Tbk has no effect on the direction of Trimitra Prawara i.e., Trimitra Prawara and Indorama Synthetics go up and down completely randomly.
Pair Corralation between Trimitra Prawara and Indorama Synthetics
Assuming the 90 days trading horizon Trimitra Prawara Goldland is expected to under-perform the Indorama Synthetics. In addition to that, Trimitra Prawara is 1.81 times more volatile than Indorama Synthetics Tbk. It trades about -0.23 of its total potential returns per unit of risk. Indorama Synthetics Tbk is currently generating about -0.14 per unit of volatility. If you would invest 286,000 in Indorama Synthetics Tbk on September 4, 2024 and sell it today you would lose (15,000) from holding Indorama Synthetics Tbk or give up 5.24% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 95.24% |
| Values | Daily Returns |
Trimitra Prawara Goldland vs. Indorama Synthetics Tbk
Performance |
| Timeline |
| Trimitra Prawara Goldland |
| Indorama Synthetics Tbk |
Trimitra Prawara and Indorama Synthetics Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Trimitra Prawara and Indorama Synthetics
The main advantage of trading using opposite Trimitra Prawara and Indorama Synthetics positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Trimitra Prawara position performs unexpectedly, Indorama Synthetics 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 Indorama Synthetics will offset losses from the drop in Indorama Synthetics' long position.| Trimitra Prawara vs. Indorama Synthetics Tbk | Trimitra Prawara vs. Hero Supermarket Tbk | Trimitra Prawara vs. Bekasi Fajar Industrial | Trimitra Prawara vs. Trinitan Metals and |
| Indorama Synthetics vs. Jakarta Int Hotels | Indorama Synthetics vs. Asuransi Harta Aman | Indorama Synthetics vs. Indosterling Technomedia Tbk | Indorama Synthetics vs. Indosat 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 Portfolio File Import module to quickly import all of your third-party portfolios from your local drive in csv format.
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