Correlation Between Communication Cable and Indosterling Technomedia
Can any of the company-specific risk be diversified away by investing in both Communication Cable and Indosterling Technomedia 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 Indosterling Technomedia 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 Indosterling Technomedia Tbk, you can compare the effects of market volatilities on Communication Cable and Indosterling Technomedia 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 Indosterling Technomedia. Check out your portfolio center. Please also check ongoing floating volatility patterns of Communication Cable and Indosterling Technomedia.
Diversification Opportunities for Communication Cable and Indosterling Technomedia
0.0 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Communication and Indosterling is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding Communication Cable Systems and Indosterling Technomedia Tbk in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Indosterling Technomedia 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 Indosterling Technomedia. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Indosterling Technomedia has no effect on the direction of Communication Cable i.e., Communication Cable and Indosterling Technomedia go up and down completely randomly.
Pair Corralation between Communication Cable and Indosterling Technomedia
Assuming the 90 days trading horizon Communication Cable Systems is expected to generate 1.09 times more return on investment than Indosterling Technomedia. However, Communication Cable is 1.09 times more volatile than Indosterling Technomedia Tbk. It trades about -0.06 of its potential returns per unit of risk. Indosterling Technomedia Tbk is currently generating about -0.33 per unit of risk. If you would invest 67,000 in Communication Cable Systems on August 31, 2024 and sell it today you would lose (41,400) from holding Communication Cable Systems or give up 61.79% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Flat |
| Strength | Insignificant |
| Accuracy | 99.78% |
| Values | Daily Returns |
Communication Cable Systems vs. Indosterling Technomedia Tbk
Performance |
| Timeline |
| Communication Cable |
| Indosterling Technomedia |
Communication Cable and Indosterling Technomedia Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Communication Cable and Indosterling Technomedia
The main advantage of trading using opposite Communication Cable and Indosterling Technomedia positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Communication Cable position performs unexpectedly, Indosterling Technomedia 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 Indosterling Technomedia will offset losses from the drop in Indosterling Technomedia'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 |
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 Anywhere module to track or share privately all of your investments from the convenience of any device.
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