Correlation Between Sepatu Bata and Indospring Tbk
Can any of the company-specific risk be diversified away by investing in both Sepatu Bata and Indospring Tbk 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 Sepatu Bata and Indospring Tbk into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Sepatu Bata Tbk and Indospring Tbk, you can compare the effects of market volatilities on Sepatu Bata and Indospring Tbk 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 Sepatu Bata with a short position of Indospring Tbk. Check out your portfolio center. Please also check ongoing floating volatility patterns of Sepatu Bata and Indospring Tbk.
Diversification Opportunities for Sepatu Bata and Indospring Tbk
0.71 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Sepatu and Indospring is 0.71. Overlapping area represents the amount of risk that can be diversified away by holding Sepatu Bata Tbk and Indospring Tbk in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Indospring Tbk and Sepatu Bata 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 Sepatu Bata Tbk are associated (or correlated) with Indospring Tbk. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Indospring Tbk has no effect on the direction of Sepatu Bata i.e., Sepatu Bata and Indospring Tbk go up and down completely randomly.
Pair Corralation between Sepatu Bata and Indospring Tbk
Assuming the 90 days trading horizon Sepatu Bata Tbk is expected to under-perform the Indospring Tbk. In addition to that, Sepatu Bata is 1.55 times more volatile than Indospring Tbk. It trades about -0.19 of its total potential returns per unit of risk. Indospring Tbk is currently generating about -0.17 per unit of volatility. If you would invest 29,200 in Indospring Tbk on August 29, 2024 and sell it today you would lose (3,600) from holding Indospring Tbk or give up 12.33% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 98.44% |
| Values | Daily Returns |
Sepatu Bata Tbk vs. Indospring Tbk
Performance |
| Timeline |
| Sepatu Bata Tbk |
| Indospring Tbk |
Sepatu Bata and Indospring Tbk Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Sepatu Bata and Indospring Tbk
The main advantage of trading using opposite Sepatu Bata and Indospring Tbk positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Sepatu Bata position performs unexpectedly, Indospring Tbk 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 Indospring Tbk will offset losses from the drop in Indospring Tbk's long position.| Sepatu Bata vs. Indo Kordsa Tbk | Sepatu Bata vs. Goodyear Indonesia Tbk | Sepatu Bata vs. Argo Pantes Tbk | Sepatu Bata vs. Primarindo Asia Infrastructure |
| Indospring Tbk vs. Indomobil Sukses Internasional | Indospring Tbk vs. Goodyear Indonesia Tbk | Indospring Tbk vs. Indorama Synthetics Tbk | Indospring Tbk vs. Astra Otoparts 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 Stocks Directory module to find actively traded stocks across global markets.
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