Correlation Between Agro Yasa and Communication Cable
Can any of the company-specific risk be diversified away by investing in both Agro Yasa and Communication Cable 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 Agro Yasa and Communication Cable into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Agro Yasa Lestari and Communication Cable Systems, you can compare the effects of market volatilities on Agro Yasa and Communication Cable 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 Agro Yasa with a short position of Communication Cable. Check out your portfolio center. Please also check ongoing floating volatility patterns of Agro Yasa and Communication Cable.
Diversification Opportunities for Agro Yasa and Communication Cable
-0.57 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Agro and Communication is -0.57. Overlapping area represents the amount of risk that can be diversified away by holding Agro Yasa Lestari and Communication Cable Systems in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Communication Cable and Agro Yasa 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 Agro Yasa Lestari are associated (or correlated) with Communication Cable. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Communication Cable has no effect on the direction of Agro Yasa i.e., Agro Yasa and Communication Cable go up and down completely randomly.
Pair Corralation between Agro Yasa and Communication Cable
Assuming the 90 days trading horizon Agro Yasa Lestari is expected to generate 1.47 times more return on investment than Communication Cable. However, Agro Yasa is 1.47 times more volatile than Communication Cable Systems. It trades about -0.01 of its potential returns per unit of risk. Communication Cable Systems is currently generating about -0.06 per unit of risk. If you would invest 11,600 in Agro Yasa Lestari on September 12, 2024 and sell it today you would lose (5,600) from holding Agro Yasa Lestari or give up 48.28% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Agro Yasa Lestari vs. Communication Cable Systems
Performance |
| Timeline |
| Agro Yasa Lestari |
| Communication Cable |
Agro Yasa and Communication Cable Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Agro Yasa and Communication Cable
The main advantage of trading using opposite Agro Yasa and Communication Cable positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Agro Yasa position performs unexpectedly, Communication Cable 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 Communication Cable will offset losses from the drop in Communication Cable's long position.| Agro Yasa vs. Sinergi Inti Plastindo | Agro Yasa vs. Bank Amar Indonesia | Agro Yasa vs. Andalan Sakti Primaindo | Agro Yasa vs. Era Mandiri Cemerlang |
| Communication Cable vs. Hartadinata Abadi Tbk | Communication Cable vs. Estika Tata Tiara | Communication Cable vs. Garudafood Putra Putri | Communication Cable vs. PT Indonesia Kendaraan |
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 Investing Opportunities module to build portfolios using our predefined set of ideas and optimize them against your investing preferences.
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