Correlation Between Capital Financial and Intiland Development
Can any of the company-specific risk be diversified away by investing in both Capital Financial and Intiland Development 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 Capital Financial and Intiland Development into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Capital Financial Indonesia and Intiland Development Tbk, you can compare the effects of market volatilities on Capital Financial and Intiland Development 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 Capital Financial with a short position of Intiland Development. Check out your portfolio center. Please also check ongoing floating volatility patterns of Capital Financial and Intiland Development.
Diversification Opportunities for Capital Financial and Intiland Development
-0.56 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Capital and Intiland is -0.56. Overlapping area represents the amount of risk that can be diversified away by holding Capital Financial Indonesia and Intiland Development Tbk in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Intiland Development Tbk and Capital Financial 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 Capital Financial Indonesia are associated (or correlated) with Intiland Development. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Intiland Development Tbk has no effect on the direction of Capital Financial i.e., Capital Financial and Intiland Development go up and down completely randomly.
Pair Corralation between Capital Financial and Intiland Development
Assuming the 90 days trading horizon Capital Financial Indonesia is expected to generate 1.4 times more return on investment than Intiland Development. However, Capital Financial is 1.4 times more volatile than Intiland Development Tbk. It trades about -0.18 of its potential returns per unit of risk. Intiland Development Tbk is currently generating about -0.32 per unit of risk. If you would invest 55,000 in Capital Financial Indonesia on September 2, 2024 and sell it today you would lose (4,000) from holding Capital Financial Indonesia or give up 7.27% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Capital Financial Indonesia vs. Intiland Development Tbk
Performance |
| Timeline |
| Capital Financial |
| Intiland Development Tbk |
Capital Financial and Intiland Development Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Capital Financial and Intiland Development
The main advantage of trading using opposite Capital Financial and Intiland Development positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Capital Financial position performs unexpectedly, Intiland Development 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 Intiland Development will offset losses from the drop in Intiland Development's long position.| Capital Financial vs. Ace Hardware Indonesia | Capital Financial vs. Merdeka Copper Gold | Capital Financial vs. Mitra Pinasthika Mustika | Capital Financial vs. Jakarta Int Hotels |
| Intiland Development vs. Sentul City Tbk | Intiland Development vs. Modernland Realty Ltd | Intiland Development vs. Kawasan Industri Jababeka | Intiland Development vs. Ciputra Development 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 USA ETFs module to find actively traded Exchange Traded Funds (ETF) in USA.
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