Correlation Between Primarindo Asia and Indo Kordsa
Can any of the company-specific risk be diversified away by investing in both Primarindo Asia and Indo Kordsa 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 Primarindo Asia and Indo Kordsa into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Primarindo Asia Infrastructure and Indo Kordsa Tbk, you can compare the effects of market volatilities on Primarindo Asia and Indo Kordsa 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 Primarindo Asia with a short position of Indo Kordsa. Check out your portfolio center. Please also check ongoing floating volatility patterns of Primarindo Asia and Indo Kordsa.
Diversification Opportunities for Primarindo Asia and Indo Kordsa
-0.09 | Correlation Coefficient |
Good diversification
The 3 months correlation between Primarindo and Indo is -0.09. Overlapping area represents the amount of risk that can be diversified away by holding Primarindo Asia Infrastructure and Indo Kordsa Tbk in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Indo Kordsa Tbk and Primarindo Asia 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 Primarindo Asia Infrastructure are associated (or correlated) with Indo Kordsa. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Indo Kordsa Tbk has no effect on the direction of Primarindo Asia i.e., Primarindo Asia and Indo Kordsa go up and down completely randomly.
Pair Corralation between Primarindo Asia and Indo Kordsa
Assuming the 90 days trading horizon Primarindo Asia Infrastructure is expected to generate 1.46 times more return on investment than Indo Kordsa. However, Primarindo Asia is 1.46 times more volatile than Indo Kordsa Tbk. It trades about 0.02 of its potential returns per unit of risk. Indo Kordsa Tbk is currently generating about 0.02 per unit of risk. If you would invest 9,500 in Primarindo Asia Infrastructure on August 29, 2024 and sell it today you would earn a total of 200.00 from holding Primarindo Asia Infrastructure or generate 2.11% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 99.57% |
| Values | Daily Returns |
Primarindo Asia Infrastructure vs. Indo Kordsa Tbk
Performance |
| Timeline |
| Primarindo Asia Infr |
| Indo Kordsa Tbk |
Primarindo Asia and Indo Kordsa Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Primarindo Asia and Indo Kordsa
The main advantage of trading using opposite Primarindo Asia and Indo Kordsa positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Primarindo Asia position performs unexpectedly, Indo Kordsa 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 Indo Kordsa will offset losses from the drop in Indo Kordsa's long position.| Primarindo Asia vs. Sepatu Bata Tbk | Primarindo Asia vs. Ever Shine Textile | Primarindo Asia vs. Argo Pantes Tbk | Primarindo Asia vs. Indo Kordsa Tbk |
| Indo Kordsa vs. Goodyear Indonesia Tbk | Indo Kordsa vs. Sepatu Bata Tbk | Indo Kordsa vs. Indospring Tbk | Indo Kordsa vs. Ever Shine Textile |
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 FinTech Suite module to use AI to screen and filter profitable investment opportunities.
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