Correlation Between Trisula Textile and Buana Listya
Can any of the company-specific risk be diversified away by investing in both Trisula Textile and Buana Listya 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 Trisula Textile and Buana Listya into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Trisula Textile Industries and Buana Listya Tama, you can compare the effects of market volatilities on Trisula Textile and Buana Listya 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 Trisula Textile with a short position of Buana Listya. Check out your portfolio center. Please also check ongoing floating volatility patterns of Trisula Textile and Buana Listya.
Diversification Opportunities for Trisula Textile and Buana Listya
0.34 | Correlation Coefficient |
Weak diversification
The 3 months correlation between Trisula and Buana is 0.34. Overlapping area represents the amount of risk that can be diversified away by holding Trisula Textile Industries and Buana Listya Tama in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Buana Listya Tama and Trisula Textile 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 Trisula Textile Industries are associated (or correlated) with Buana Listya. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Buana Listya Tama has no effect on the direction of Trisula Textile i.e., Trisula Textile and Buana Listya go up and down completely randomly.
Pair Corralation between Trisula Textile and Buana Listya
Assuming the 90 days trading horizon Trisula Textile Industries is expected to generate 0.43 times more return on investment than Buana Listya. However, Trisula Textile Industries is 2.32 times less risky than Buana Listya. It trades about -0.32 of its potential returns per unit of risk. Buana Listya Tama is currently generating about -0.18 per unit of risk. If you would invest 7,300 in Trisula Textile Industries on August 25, 2024 and sell it today you would lose (1,100) from holding Trisula Textile Industries or give up 15.07% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 95.65% |
| Values | Daily Returns |
Trisula Textile Industries vs. Buana Listya Tama
Performance |
| Timeline |
| Trisula Textile Indu |
| Buana Listya Tama |
Trisula Textile and Buana Listya Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Trisula Textile and Buana Listya
The main advantage of trading using opposite Trisula Textile and Buana Listya positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Trisula Textile position performs unexpectedly, Buana Listya 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 Buana Listya will offset losses from the drop in Buana Listya's long position.| Trisula Textile vs. Bintang Oto Global | Trisula Textile vs. Trisula International Tbk | Trisula Textile vs. Bali Towerindo Sentra | Trisula Textile vs. Garuda Metalindo Tbk |
| Buana Listya vs. Rukun Raharja Tbk | Buana Listya vs. PT Temas Tbk | Buana Listya vs. Weha Transportasi 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 Portfolio Volatility module to check portfolio volatility and analyze historical return density to properly model market risk.
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