Correlation Between Indoritel Makmur and Obm Drilchem
Can any of the company-specific risk be diversified away by investing in both Indoritel Makmur and Obm Drilchem 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 Indoritel Makmur and Obm Drilchem into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Indoritel Makmur Internasional and Obm Drilchem PT, you can compare the effects of market volatilities on Indoritel Makmur and Obm Drilchem 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 Indoritel Makmur with a short position of Obm Drilchem. Check out your portfolio center. Please also check ongoing floating volatility patterns of Indoritel Makmur and Obm Drilchem.
Diversification Opportunities for Indoritel Makmur and Obm Drilchem
-0.43 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Indoritel and Obm is -0.43. Overlapping area represents the amount of risk that can be diversified away by holding Indoritel Makmur Internasional and Obm Drilchem PT in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Obm Drilchem PT and Indoritel Makmur 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 Indoritel Makmur Internasional are associated (or correlated) with Obm Drilchem. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Obm Drilchem PT has no effect on the direction of Indoritel Makmur i.e., Indoritel Makmur and Obm Drilchem go up and down completely randomly.
Pair Corralation between Indoritel Makmur and Obm Drilchem
Assuming the 90 days trading horizon Indoritel Makmur Internasional is expected to generate 0.99 times more return on investment than Obm Drilchem. However, Indoritel Makmur Internasional is 1.01 times less risky than Obm Drilchem. It trades about 0.1 of its potential returns per unit of risk. Obm Drilchem PT is currently generating about 0.03 per unit of risk. If you would invest 400,000 in Indoritel Makmur Internasional on August 31, 2024 and sell it today you would earn a total of 515,000 from holding Indoritel Makmur Internasional or generate 128.75% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 99.72% |
| Values | Daily Returns |
Indoritel Makmur Internasional vs. Obm Drilchem PT
Performance |
| Timeline |
| Indoritel Makmur Int |
| Obm Drilchem PT |
Indoritel Makmur and Obm Drilchem Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Indoritel Makmur and Obm Drilchem
The main advantage of trading using opposite Indoritel Makmur and Obm Drilchem positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Indoritel Makmur position performs unexpectedly, Obm Drilchem 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 Obm Drilchem will offset losses from the drop in Obm Drilchem's long position.| Indoritel Makmur vs. Indosat Tbk | Indoritel Makmur vs. XL Axiata Tbk | Indoritel Makmur vs. Energi Mega Persada | Indoritel Makmur vs. Bakrie Brothers Tbk |
| Obm Drilchem vs. RMK Energy PT | Obm Drilchem vs. PT Hasnur Internasional | Obm Drilchem vs. Surya Biru Murni | Obm Drilchem vs. PAM Mineral 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 Portfolio Backtesting module to avoid under-diversification and over-optimization by backtesting your portfolios.
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