Correlation Between XL Axiata and Roda Vivatex
Can any of the company-specific risk be diversified away by investing in both XL Axiata and Roda Vivatex 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 Roda Vivatex 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 Roda Vivatex Tbk, you can compare the effects of market volatilities on XL Axiata and Roda Vivatex 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 Roda Vivatex. Check out your portfolio center. Please also check ongoing floating volatility patterns of XL Axiata and Roda Vivatex.
Diversification Opportunities for XL Axiata and Roda Vivatex
-0.55 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between EXCL and Roda is -0.55. Overlapping area represents the amount of risk that can be diversified away by holding XL Axiata Tbk and Roda Vivatex Tbk in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Roda Vivatex 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 Roda Vivatex. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Roda Vivatex Tbk has no effect on the direction of XL Axiata i.e., XL Axiata and Roda Vivatex go up and down completely randomly.
Pair Corralation between XL Axiata and Roda Vivatex
Assuming the 90 days trading horizon XL Axiata Tbk is expected to under-perform the Roda Vivatex. But the stock apears to be less risky and, when comparing its historical volatility, XL Axiata Tbk is 1.95 times less risky than Roda Vivatex. The stock trades about -0.15 of its potential returns per unit of risk. The Roda Vivatex Tbk is currently generating about 0.0 of returns per unit of risk over similar time horizon. If you would invest 1,507,500 in Roda Vivatex Tbk on August 27, 2024 and sell it today you would lose (7,500) from holding Roda Vivatex Tbk or give up 0.5% 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. Roda Vivatex Tbk
Performance |
| Timeline |
| XL Axiata Tbk |
| Roda Vivatex Tbk |
XL Axiata and Roda Vivatex Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with XL Axiata and Roda Vivatex
The main advantage of trading using opposite XL Axiata and Roda Vivatex positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if XL Axiata position performs unexpectedly, Roda Vivatex 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 Roda Vivatex will offset losses from the drop in Roda Vivatex'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 |
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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 Directory module to find actively traded commodities issued by global exchanges.
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