Correlation Between Smartfren Telecom and Limas Indonesia
Can any of the company-specific risk be diversified away by investing in both Smartfren Telecom and Limas 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 Smartfren Telecom and Limas Indonesia into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Smartfren Telecom Tbk and Limas Indonesia Makmur, you can compare the effects of market volatilities on Smartfren Telecom and Limas 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 Smartfren Telecom with a short position of Limas Indonesia. Check out your portfolio center. Please also check ongoing floating volatility patterns of Smartfren Telecom and Limas Indonesia.
Diversification Opportunities for Smartfren Telecom and Limas Indonesia
0.0 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Smartfren and Limas is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding Smartfren Telecom Tbk and Limas Indonesia Makmur in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Limas Indonesia Makmur and Smartfren Telecom 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 Smartfren Telecom Tbk are associated (or correlated) with Limas Indonesia. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Limas Indonesia Makmur has no effect on the direction of Smartfren Telecom i.e., Smartfren Telecom and Limas Indonesia go up and down completely randomly.
Pair Corralation between Smartfren Telecom and Limas Indonesia
If you would invest 5,000 in Limas Indonesia Makmur on September 4, 2024 and sell it today you would earn a total of 0.00 from holding Limas Indonesia Makmur or generate 0.0% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Flat |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Smartfren Telecom Tbk vs. Limas Indonesia Makmur
Performance |
| Timeline |
| Smartfren Telecom Tbk |
| Limas Indonesia Makmur |
Smartfren Telecom and Limas Indonesia Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Smartfren Telecom and Limas Indonesia
The main advantage of trading using opposite Smartfren Telecom and Limas Indonesia positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Smartfren Telecom position performs unexpectedly, Limas 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 Limas Indonesia will offset losses from the drop in Limas Indonesia's long position.| Smartfren Telecom vs. Indosat Tbk | Smartfren Telecom vs. XL Axiata Tbk | Smartfren Telecom vs. Energi Mega Persada | Smartfren Telecom vs. Bakrie Brothers Tbk |
| Limas Indonesia vs. Dunia Virtual Online | Limas Indonesia vs. Wintermar Offshore Marine | Limas Indonesia vs. Steel Pipe Industry | Limas Indonesia vs. Tridomain Performance Materials |
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 Center module to all portfolio management and optimization tools to improve performance of your portfolios.
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