Correlation Between Communication Cable and PT Pelayaran
Can any of the company-specific risk be diversified away by investing in both Communication Cable and PT Pelayaran 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 PT Pelayaran 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 PT Pelayaran Tamarin, you can compare the effects of market volatilities on Communication Cable and PT Pelayaran 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 PT Pelayaran. Check out your portfolio center. Please also check ongoing floating volatility patterns of Communication Cable and PT Pelayaran.
Diversification Opportunities for Communication Cable and PT Pelayaran
0.67 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Communication and TAMU is 0.67. Overlapping area represents the amount of risk that can be diversified away by holding Communication Cable Systems and PT Pelayaran Tamarin in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on PT Pelayaran Tamarin 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 PT Pelayaran. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of PT Pelayaran Tamarin has no effect on the direction of Communication Cable i.e., Communication Cable and PT Pelayaran go up and down completely randomly.
Pair Corralation between Communication Cable and PT Pelayaran
Assuming the 90 days trading horizon Communication Cable Systems is expected to under-perform the PT Pelayaran. But the stock apears to be less risky and, when comparing its historical volatility, Communication Cable Systems is 1.88 times less risky than PT Pelayaran. The stock trades about -0.06 of its potential returns per unit of risk. The PT Pelayaran Tamarin is currently generating about 0.06 of returns per unit of risk over similar time horizon. If you would invest 900.00 in PT Pelayaran Tamarin on August 25, 2024 and sell it today you would earn a total of 500.00 from holding PT Pelayaran Tamarin or generate 55.56% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 99.61% |
| Values | Daily Returns |
Communication Cable Systems vs. PT Pelayaran Tamarin
Performance |
| Timeline |
| Communication Cable |
| PT Pelayaran Tamarin |
Communication Cable and PT Pelayaran Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Communication Cable and PT Pelayaran
The main advantage of trading using opposite Communication Cable and PT Pelayaran positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Communication Cable position performs unexpectedly, PT Pelayaran 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 PT Pelayaran will offset losses from the drop in PT Pelayaran'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 |
| PT Pelayaran vs. Lion Metal Works | PT Pelayaran vs. Communication Cable Systems | PT Pelayaran vs. PT Indofood Sukses | PT Pelayaran vs. PT Charlie Hospital |
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 Portfolio Manager module to state of the art Portfolio Manager to monitor and improve performance of your invested capital.
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