Correlation Between Equity Development and Tifa Finance
Can any of the company-specific risk be diversified away by investing in both Equity Development and Tifa Finance 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 Equity Development and Tifa Finance into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Equity Development Investment and Tifa Finance Tbk, you can compare the effects of market volatilities on Equity Development and Tifa Finance 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 Equity Development with a short position of Tifa Finance. Check out your portfolio center. Please also check ongoing floating volatility patterns of Equity Development and Tifa Finance.
Diversification Opportunities for Equity Development and Tifa Finance
-0.25 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Equity and Tifa is -0.25. Overlapping area represents the amount of risk that can be diversified away by holding Equity Development Investment and Tifa Finance Tbk in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Tifa Finance Tbk and Equity Development 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 Equity Development Investment are associated (or correlated) with Tifa Finance. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Tifa Finance Tbk has no effect on the direction of Equity Development i.e., Equity Development and Tifa Finance go up and down completely randomly.
Pair Corralation between Equity Development and Tifa Finance
Assuming the 90 days trading horizon Equity Development Investment is expected to generate 1.24 times more return on investment than Tifa Finance. However, Equity Development is 1.24 times more volatile than Tifa Finance Tbk. It trades about 0.0 of its potential returns per unit of risk. Tifa Finance Tbk is currently generating about -0.01 per unit of risk. If you would invest 6,200 in Equity Development Investment on September 2, 2024 and sell it today you would lose (300.00) from holding Equity Development Investment or give up 4.84% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Equity Development Investment vs. Tifa Finance Tbk
Performance |
| Timeline |
| Equity Development |
| Tifa Finance Tbk |
Equity Development and Tifa Finance Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Equity Development and Tifa Finance
The main advantage of trading using opposite Equity Development and Tifa Finance positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Equity Development position performs unexpectedly, Tifa Finance 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 Tifa Finance will offset losses from the drop in Tifa Finance's long position.| Equity Development vs. Pacific Strategic Financial | Equity Development vs. Asuransi Harta Aman | Equity Development vs. Buana Finance Tbk | Equity Development vs. Asuransi Bintang Tbk |
| Tifa Finance vs. Ace Hardware Indonesia | Tifa Finance vs. Merdeka Copper Gold | Tifa Finance vs. Mitra Pinasthika Mustika | Tifa Finance vs. Jakarta Int Hotels |
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 Positions Ratings module to 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.
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