Correlation Between Capital Financial and Inocycle Technology
Can any of the company-specific risk be diversified away by investing in both Capital Financial and Inocycle Technology 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 Inocycle Technology 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 Inocycle Technology Tbk, you can compare the effects of market volatilities on Capital Financial and Inocycle Technology 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 Inocycle Technology. Check out your portfolio center. Please also check ongoing floating volatility patterns of Capital Financial and Inocycle Technology.
Diversification Opportunities for Capital Financial and Inocycle Technology
0.72 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Capital and Inocycle is 0.72. Overlapping area represents the amount of risk that can be diversified away by holding Capital Financial Indonesia and Inocycle Technology Tbk in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Inocycle Technology 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 Inocycle Technology. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Inocycle Technology Tbk has no effect on the direction of Capital Financial i.e., Capital Financial and Inocycle Technology go up and down completely randomly.
Pair Corralation between Capital Financial and Inocycle Technology
Assuming the 90 days trading horizon Capital Financial Indonesia is expected to under-perform the Inocycle Technology. In addition to that, Capital Financial is 1.0 times more volatile than Inocycle Technology Tbk. It trades about -0.18 of its total potential returns per unit of risk. Inocycle Technology Tbk is currently generating about -0.07 per unit of volatility. If you would invest 10,300 in Inocycle Technology Tbk on September 2, 2024 and sell it today you would lose (300.00) from holding Inocycle Technology Tbk or give up 2.91% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Capital Financial Indonesia vs. Inocycle Technology Tbk
Performance |
| Timeline |
| Capital Financial |
| Inocycle Technology Tbk |
Capital Financial and Inocycle Technology Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Capital Financial and Inocycle Technology
The main advantage of trading using opposite Capital Financial and Inocycle Technology positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Capital Financial position performs unexpectedly, Inocycle Technology 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 Inocycle Technology will offset losses from the drop in Inocycle Technology'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 |
| Inocycle Technology vs. MNC Vision Networks | Inocycle Technology vs. Hartadinata Abadi Tbk | Inocycle Technology vs. Kencana Energi Lestari | Inocycle Technology vs. Bali Bintang Sejahtera |
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 Aroon Oscillator module to analyze current equity momentum using Aroon Oscillator and other momentum ratios.
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