Correlation Between Communication Cable and PT Winner
Can any of the company-specific risk be diversified away by investing in both Communication Cable and PT Winner 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 Winner 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 Winner Nusantara, you can compare the effects of market volatilities on Communication Cable and PT Winner 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 Winner. Check out your portfolio center. Please also check ongoing floating volatility patterns of Communication Cable and PT Winner.
Diversification Opportunities for Communication Cable and PT Winner
0.11 | Correlation Coefficient |
Average diversification
The 3 months correlation between Communication and WINR is 0.11. Overlapping area represents the amount of risk that can be diversified away by holding Communication Cable Systems and PT Winner Nusantara in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on PT Winner Nusantara 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 Winner. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of PT Winner Nusantara has no effect on the direction of Communication Cable i.e., Communication Cable and PT Winner go up and down completely randomly.
Pair Corralation between Communication Cable and PT Winner
Assuming the 90 days trading horizon Communication Cable Systems is expected to generate 0.74 times more return on investment than PT Winner. However, Communication Cable Systems is 1.36 times less risky than PT Winner. It trades about -0.07 of its potential returns per unit of risk. PT Winner Nusantara is currently generating about -0.06 per unit of risk. If you would invest 62,500 in Communication Cable Systems on September 12, 2024 and sell it today you would lose (38,700) from holding Communication Cable Systems or give up 61.92% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 99.71% |
| Values | Daily Returns |
Communication Cable Systems vs. PT Winner Nusantara
Performance |
| Timeline |
| Communication Cable |
| PT Winner Nusantara |
Communication Cable and PT Winner Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Communication Cable and PT Winner
The main advantage of trading using opposite Communication Cable and PT Winner positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Communication Cable position performs unexpectedly, PT Winner 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 Winner will offset losses from the drop in PT Winner's long position.| Communication Cable vs. Hartadinata Abadi Tbk | Communication Cable vs. Estika Tata Tiara | Communication Cable vs. Garudafood Putra Putri | Communication Cable vs. PT Indonesia Kendaraan |
| PT Winner vs. Weha Transportasi Indonesia | PT Winner vs. Protech Mitra Perkasa | PT Winner vs. Communication Cable Systems | PT Winner vs. Media Nusantara Citra |
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 Money Flow Index module to determine momentum by analyzing Money Flow Index and other technical indicators.
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