Correlation Between Intiland Development and Central Omega
Can any of the company-specific risk be diversified away by investing in both Intiland Development and Central Omega 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 Intiland Development and Central Omega into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Intiland Development Tbk and Central Omega Resources, you can compare the effects of market volatilities on Intiland Development and Central Omega 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 Intiland Development with a short position of Central Omega. Check out your portfolio center. Please also check ongoing floating volatility patterns of Intiland Development and Central Omega.
Diversification Opportunities for Intiland Development and Central Omega
-0.79 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Intiland and Central is -0.79. Overlapping area represents the amount of risk that can be diversified away by holding Intiland Development Tbk and Central Omega Resources in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Central Omega Resources and Intiland Development 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 Intiland Development Tbk are associated (or correlated) with Central Omega. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Central Omega Resources has no effect on the direction of Intiland Development i.e., Intiland Development and Central Omega go up and down completely randomly.
Pair Corralation between Intiland Development and Central Omega
Assuming the 90 days trading horizon Intiland Development is expected to generate 17.95 times less return on investment than Central Omega. But when comparing it to its historical volatility, Intiland Development Tbk is 2.34 times less risky than Central Omega. It trades about 0.02 of its potential returns per unit of risk. Central Omega Resources is currently generating about 0.15 of returns per unit of risk over similar time horizon. If you would invest 10,300 in Central Omega Resources on August 28, 2024 and sell it today you would earn a total of 11,100 from holding Central Omega Resources or generate 107.77% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Intiland Development Tbk vs. Central Omega Resources
Performance |
| Timeline |
| Intiland Development Tbk |
| Central Omega Resources |
Intiland Development and Central Omega Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Intiland Development and Central Omega
The main advantage of trading using opposite Intiland Development and Central Omega positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Intiland Development position performs unexpectedly, Central Omega 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 Central Omega will offset losses from the drop in Central Omega's long position.| Intiland Development vs. Sentul City Tbk | Intiland Development vs. Modernland Realty Ltd | Intiland Development vs. Kawasan Industri Jababeka | Intiland Development vs. Ciputra Development Tbk |
| Central Omega vs. Cita Mineral Investindo | Central Omega vs. Intiland Development Tbk | Central Omega vs. J Resources Asia | Central Omega vs. Resource Alam Indonesia |
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 Bollinger Bands module to use Bollinger Bands indicator to analyze target price for a given investing horizon.
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