Correlation Between XL Axiata and Fortune Indonesia
Can any of the company-specific risk be diversified away by investing in both XL Axiata and Fortune Indonesia 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 XL Axiata and Fortune Indonesia into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between XL Axiata Tbk and Fortune Indonesia Tbk, you can compare the effects of market volatilities on XL Axiata and Fortune Indonesia 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 XL Axiata with a short position of Fortune Indonesia. Check out your portfolio center. Please also check ongoing floating volatility patterns of XL Axiata and Fortune Indonesia.
Diversification Opportunities for XL Axiata and Fortune Indonesia
-0.5 | Correlation Coefficient |
Very good diversification
The 3 months correlation between EXCL and Fortune is -0.5. Overlapping area represents the amount of risk that can be diversified away by holding XL Axiata Tbk and Fortune Indonesia Tbk in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Fortune Indonesia Tbk and XL Axiata 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 XL Axiata Tbk are associated (or correlated) with Fortune Indonesia. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Fortune Indonesia Tbk has no effect on the direction of XL Axiata i.e., XL Axiata and Fortune Indonesia go up and down completely randomly.
Pair Corralation between XL Axiata and Fortune Indonesia
Assuming the 90 days trading horizon XL Axiata Tbk is expected to generate 0.13 times more return on investment than Fortune Indonesia. However, XL Axiata Tbk is 7.83 times less risky than Fortune Indonesia. It trades about -0.05 of its potential returns per unit of risk. Fortune Indonesia Tbk is currently generating about -0.18 per unit of risk. If you would invest 225,000 in XL Axiata Tbk on September 2, 2024 and sell it today you would lose (3,000) from holding XL Axiata Tbk or give up 1.33% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
XL Axiata Tbk vs. Fortune Indonesia Tbk
Performance |
| Timeline |
| XL Axiata Tbk |
| Fortune Indonesia Tbk |
XL Axiata and Fortune Indonesia Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with XL Axiata and Fortune Indonesia
The main advantage of trading using opposite XL Axiata and Fortune Indonesia positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if XL Axiata position performs unexpectedly, Fortune Indonesia 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 Fortune Indonesia will offset losses from the drop in Fortune Indonesia's long position.| XL Axiata vs. Indosat Tbk | XL Axiata vs. Jasa Marga Tbk | XL Axiata vs. Indocement Tunggal Prakarsa | XL Axiata vs. Semen Indonesia Persero |
| Fortune Indonesia vs. Gema Grahasarana Tbk | Fortune Indonesia vs. Bayu Buana Tbk | Fortune Indonesia vs. Fast Food Indonesia | Fortune Indonesia vs. Mahaka Media 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 Equity Valuation module to check real value of public entities based on technical and fundamental data.
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