Correlation Between Indo Kordsa and Indospring Tbk
Can any of the company-specific risk be diversified away by investing in both Indo Kordsa 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 Indo Kordsa and Indospring Tbk into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Indo Kordsa Tbk and Indospring Tbk, you can compare the effects of market volatilities on Indo Kordsa 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 Indo Kordsa with a short position of Indospring Tbk. Check out your portfolio center. Please also check ongoing floating volatility patterns of Indo Kordsa and Indospring Tbk.
Diversification Opportunities for Indo Kordsa and Indospring Tbk
0.45 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Indo and Indospring is 0.45. Overlapping area represents the amount of risk that can be diversified away by holding Indo Kordsa Tbk and Indospring Tbk in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Indospring Tbk and Indo Kordsa 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 Indo Kordsa 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 Indo Kordsa i.e., Indo Kordsa and Indospring Tbk go up and down completely randomly.
Pair Corralation between Indo Kordsa and Indospring Tbk
Assuming the 90 days trading horizon Indo Kordsa Tbk is expected to generate 1.66 times more return on investment than Indospring Tbk. However, Indo Kordsa is 1.66 times more volatile than Indospring Tbk. It trades about 0.0 of its potential returns per unit of risk. Indospring Tbk is currently generating about -0.08 per unit of risk. If you would invest 590,000 in Indo Kordsa Tbk on November 3, 2024 and sell it today you would lose (2,500) from holding Indo Kordsa Tbk or give up 0.42% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Indo Kordsa Tbk vs. Indospring Tbk
Performance |
| Timeline |
| Indo Kordsa Tbk |
| Indospring Tbk |
Indo Kordsa and Indospring Tbk Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Indo Kordsa and Indospring Tbk
The main advantage of trading using opposite Indo Kordsa and Indospring Tbk positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Indo Kordsa 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.| Indo Kordsa vs. Goodyear Indonesia Tbk | Indo Kordsa vs. Sepatu Bata Tbk | Indo Kordsa vs. Indospring Tbk | Indo Kordsa vs. Ever Shine Textile |
| 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 Bollinger Bands module to use Bollinger Bands indicator to analyze target price for a given investing horizon.
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