Correlation Between Communication Cable and Indoritel Makmur
Can any of the company-specific risk be diversified away by investing in both Communication Cable and Indoritel Makmur 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 Communication Cable and Indoritel Makmur into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Communication Cable Systems and Indoritel Makmur Internasional, you can compare the effects of market volatilities on Communication Cable and Indoritel Makmur 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 Communication Cable with a short position of Indoritel Makmur. Check out your portfolio center. Please also check ongoing floating volatility patterns of Communication Cable and Indoritel Makmur.
Diversification Opportunities for Communication Cable and Indoritel Makmur
-0.26 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Communication and Indoritel is -0.26. Overlapping area represents the amount of risk that can be diversified away by holding Communication Cable Systems and Indoritel Makmur Internasional in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Indoritel Makmur Int and Communication Cable 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 Communication Cable Systems are associated (or correlated) with Indoritel Makmur. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Indoritel Makmur Int has no effect on the direction of Communication Cable i.e., Communication Cable and Indoritel Makmur go up and down completely randomly.
Pair Corralation between Communication Cable and Indoritel Makmur
Assuming the 90 days trading horizon Communication Cable Systems is expected to generate 7.75 times more return on investment than Indoritel Makmur. However, Communication Cable is 7.75 times more volatile than Indoritel Makmur Internasional. It trades about 0.04 of its potential returns per unit of risk. Indoritel Makmur Internasional is currently generating about -0.06 per unit of risk. If you would invest 25,200 in Communication Cable Systems on September 1, 2024 and sell it today you would earn a total of 400.00 from holding Communication Cable Systems or generate 1.59% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 95.45% |
| Values | Daily Returns |
Communication Cable Systems vs. Indoritel Makmur Internasional
Performance |
| Timeline |
| Communication Cable |
| Indoritel Makmur Int |
Communication Cable and Indoritel Makmur Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Communication Cable and Indoritel Makmur
The main advantage of trading using opposite Communication Cable and Indoritel Makmur positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Communication Cable position performs unexpectedly, Indoritel Makmur 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 Indoritel Makmur will offset losses from the drop in Indoritel Makmur's long position.| Communication Cable vs. Berkah Prima Perkasa | Communication Cable vs. Hartadinata Abadi Tbk | Communication Cable vs. Estika Tata Tiara | Communication Cable vs. Garudafood Putra Putri |
| Indoritel Makmur vs. Indosat Tbk | Indoritel Makmur vs. XL Axiata Tbk | Indoritel Makmur vs. Energi Mega Persada | Indoritel Makmur vs. Bakrie Brothers 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 Premium Stories module to follow Macroaxis premium stories from verified contributors across different equity types, categories and coverage scope.
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