Correlation Between Fletcher Building and PT Semen
Can any of the company-specific risk be diversified away by investing in both Fletcher Building and PT Semen 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 Fletcher Building and PT Semen into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Fletcher Building Ltd and PT Semen Indonesia, you can compare the effects of market volatilities on Fletcher Building and PT Semen 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 Fletcher Building with a short position of PT Semen. Check out your portfolio center. Please also check ongoing floating volatility patterns of Fletcher Building and PT Semen.
Diversification Opportunities for Fletcher Building and PT Semen
0.62 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Fletcher and PSGTF is 0.62. Overlapping area represents the amount of risk that can be diversified away by holding Fletcher Building Ltd and PT Semen Indonesia in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on PT Semen Indonesia and Fletcher Building 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 Fletcher Building Ltd are associated (or correlated) with PT Semen. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of PT Semen Indonesia has no effect on the direction of Fletcher Building i.e., Fletcher Building and PT Semen go up and down completely randomly.
Pair Corralation between Fletcher Building and PT Semen
Assuming the 90 days horizon Fletcher Building Ltd is expected to generate 0.05 times more return on investment than PT Semen. However, Fletcher Building Ltd is 19.24 times less risky than PT Semen. It trades about 0.22 of its potential returns per unit of risk. PT Semen Indonesia is currently generating about -0.22 per unit of risk. If you would invest 295.00 in Fletcher Building Ltd on November 3, 2024 and sell it today you would earn a total of 2.00 from holding Fletcher Building Ltd or generate 0.68% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Fletcher Building Ltd vs. PT Semen Indonesia
Performance |
| Timeline |
| Fletcher Building |
| PT Semen Indonesia |
Fletcher Building and PT Semen Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Fletcher Building and PT Semen
The main advantage of trading using opposite Fletcher Building and PT Semen positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Fletcher Building position performs unexpectedly, PT Semen 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 PT Semen will offset losses from the drop in PT Semen's long position.| Fletcher Building vs. Cementos Pacasmayo SAA | Fletcher Building vs. Summit Materials | Fletcher Building vs. Eagle Materials | Fletcher Building vs. CRH PLC ADR |
| PT Semen vs. Silicon Gaming | PT Semen vs. Visteon Corp | PT Semen vs. Hochschild Mining PLC | PT Semen vs. Marine Products |
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 Analyzer module to portfolio analysis module that provides access to portfolio diagnostics and optimization engine.
Other Complementary Tools
| Positions Ratings Determine portfolio positions ratings based on digital equity recommendations. Macroaxis instant position ratings are based on combination of fundamental analysis and risk-adjusted market performance | |
| Portfolio Dashboard Portfolio dashboard that provides centralized access to all your investments | |
| Volatility Analysis Get historical volatility and risk analysis based on latest market data | |
| Equity Valuation Check real value of public entities based on technical and fundamental data | |
| Portfolio File Import Quickly import all of your third-party portfolios from your local drive in csv format |