Correlation Between Hexindo Adiperkasa and Tempo Scan
Can any of the company-specific risk be diversified away by investing in both Hexindo Adiperkasa and Tempo Scan 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 Hexindo Adiperkasa and Tempo Scan into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Hexindo Adiperkasa Tbk and Tempo Scan Pacific, you can compare the effects of market volatilities on Hexindo Adiperkasa and Tempo Scan 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 Hexindo Adiperkasa with a short position of Tempo Scan. Check out your portfolio center. Please also check ongoing floating volatility patterns of Hexindo Adiperkasa and Tempo Scan.
Diversification Opportunities for Hexindo Adiperkasa and Tempo Scan
-0.01 | Correlation Coefficient |
Good diversification
The 3 months correlation between Hexindo and Tempo is -0.01. Overlapping area represents the amount of risk that can be diversified away by holding Hexindo Adiperkasa Tbk and Tempo Scan Pacific in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Tempo Scan Pacific and Hexindo Adiperkasa 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 Hexindo Adiperkasa Tbk are associated (or correlated) with Tempo Scan. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Tempo Scan Pacific has no effect on the direction of Hexindo Adiperkasa i.e., Hexindo Adiperkasa and Tempo Scan go up and down completely randomly.
Pair Corralation between Hexindo Adiperkasa and Tempo Scan
Assuming the 90 days trading horizon Hexindo Adiperkasa is expected to generate 25.84 times less return on investment than Tempo Scan. But when comparing it to its historical volatility, Hexindo Adiperkasa Tbk is 1.57 times less risky than Tempo Scan. It trades about 0.01 of its potential returns per unit of risk. Tempo Scan Pacific is currently generating about 0.09 of returns per unit of risk over similar time horizon. If you would invest 118,685 in Tempo Scan Pacific on August 26, 2024 and sell it today you would earn a total of 139,315 from holding Tempo Scan Pacific or generate 117.38% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Hexindo Adiperkasa Tbk vs. Tempo Scan Pacific
Performance |
| Timeline |
| Hexindo Adiperkasa Tbk |
| Tempo Scan Pacific |
Hexindo Adiperkasa and Tempo Scan Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Hexindo Adiperkasa and Tempo Scan
The main advantage of trading using opposite Hexindo Adiperkasa and Tempo Scan positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Hexindo Adiperkasa position performs unexpectedly, Tempo Scan 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 Tempo Scan will offset losses from the drop in Tempo Scan's long position.| Hexindo Adiperkasa vs. Rukun Raharja Tbk | Hexindo Adiperkasa vs. PT Temas Tbk | Hexindo Adiperkasa vs. Weha Transportasi Indonesia |
| Tempo Scan vs. Astra Graphia Tbk | Tempo Scan vs. Hexindo Adiperkasa Tbk | Tempo Scan vs. Lautan Luas Tbk | Tempo Scan vs. Citra Marga Nusaphala |
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 CEOs Directory module to screen CEOs from public companies around the world.
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