Correlation Between PT Hexindo and CHINA VANKE
Can any of the company-specific risk be diversified away by investing in both PT Hexindo and CHINA VANKE 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 PT Hexindo and CHINA VANKE into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between PT Hexindo Adiperkasa and CHINA VANKE TD, you can compare the effects of market volatilities on PT Hexindo and CHINA VANKE 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 PT Hexindo with a short position of CHINA VANKE. Check out your portfolio center. Please also check ongoing floating volatility patterns of PT Hexindo and CHINA VANKE.
Diversification Opportunities for PT Hexindo and CHINA VANKE
-0.56 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between HX1A and CHINA is -0.56. Overlapping area represents the amount of risk that can be diversified away by holding PT Hexindo Adiperkasa and CHINA VANKE TD in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on CHINA VANKE TD and PT Hexindo 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 PT Hexindo Adiperkasa are associated (or correlated) with CHINA VANKE. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of CHINA VANKE TD has no effect on the direction of PT Hexindo i.e., PT Hexindo and CHINA VANKE go up and down completely randomly.
Pair Corralation between PT Hexindo and CHINA VANKE
Assuming the 90 days trading horizon PT Hexindo is expected to generate 3.83 times less return on investment than CHINA VANKE. But when comparing it to its historical volatility, PT Hexindo Adiperkasa is 2.63 times less risky than CHINA VANKE. It trades about 0.01 of its potential returns per unit of risk. CHINA VANKE TD is currently generating about 0.02 of returns per unit of risk over similar time horizon. If you would invest 176.00 in CHINA VANKE TD on August 27, 2024 and sell it today you would lose (102.00) from holding CHINA VANKE TD or give up 57.95% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
PT Hexindo Adiperkasa vs. CHINA VANKE TD
Performance |
| Timeline |
| PT Hexindo Adiperkasa |
| CHINA VANKE TD |
PT Hexindo and CHINA VANKE Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with PT Hexindo and CHINA VANKE
The main advantage of trading using opposite PT Hexindo and CHINA VANKE positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if PT Hexindo position performs unexpectedly, CHINA VANKE 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 CHINA VANKE will offset losses from the drop in CHINA VANKE's long position.| PT Hexindo vs. United Rentals | PT Hexindo vs. Superior Plus Corp | PT Hexindo vs. NMI Holdings | PT Hexindo vs. Origin Agritech |
| CHINA VANKE vs. Superior Plus Corp | CHINA VANKE vs. NMI Holdings | CHINA VANKE vs. Origin Agritech | CHINA VANKE vs. SIVERS SEMICONDUCTORS AB |
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 Watchlist Optimization module to optimize watchlists to build efficient portfolios or rebalance existing positions based on the mean-variance optimization algorithm.
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