Correlation Between Intiland Development and Resource Alam
Can any of the company-specific risk be diversified away by investing in both Intiland Development and Resource Alam 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 Resource Alam 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 Resource Alam Indonesia, you can compare the effects of market volatilities on Intiland Development and Resource Alam 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 Resource Alam. Check out your portfolio center. Please also check ongoing floating volatility patterns of Intiland Development and Resource Alam.
Diversification Opportunities for Intiland Development and Resource Alam
0.48 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Intiland and Resource is 0.48. Overlapping area represents the amount of risk that can be diversified away by holding Intiland Development Tbk and Resource Alam Indonesia in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Resource Alam Indonesia 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 Resource Alam. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Resource Alam Indonesia has no effect on the direction of Intiland Development i.e., Intiland Development and Resource Alam go up and down completely randomly.
Pair Corralation between Intiland Development and Resource Alam
Assuming the 90 days trading horizon Intiland Development Tbk is expected to generate 0.91 times more return on investment than Resource Alam. However, Intiland Development Tbk is 1.09 times less risky than Resource Alam. It trades about -0.07 of its potential returns per unit of risk. Resource Alam Indonesia is currently generating about -0.11 per unit of risk. If you would invest 19,100 in Intiland Development Tbk on August 28, 2024 and sell it today you would lose (2,000) from holding Intiland Development Tbk or give up 10.47% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Intiland Development Tbk vs. Resource Alam Indonesia
Performance |
| Timeline |
| Intiland Development Tbk |
| Resource Alam Indonesia |
Intiland Development and Resource Alam Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Intiland Development and Resource Alam
The main advantage of trading using opposite Intiland Development and Resource Alam positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Intiland Development position performs unexpectedly, Resource Alam 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 Resource Alam will offset losses from the drop in Resource Alam'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 |
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 Commodity Channel module to use Commodity Channel Index to analyze current equity momentum.
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