Correlation Between PT Hexindo and Japan Real
Can any of the company-specific risk be diversified away by investing in both PT Hexindo and Japan Real 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 Japan Real 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 Japan Real Estate, you can compare the effects of market volatilities on PT Hexindo and Japan Real 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 Japan Real. Check out your portfolio center. Please also check ongoing floating volatility patterns of PT Hexindo and Japan Real.
Diversification Opportunities for PT Hexindo and Japan Real
0.79 | Correlation Coefficient |
Poor diversification
The 3 months correlation between HX1A and Japan is 0.79. Overlapping area represents the amount of risk that can be diversified away by holding PT Hexindo Adiperkasa and Japan Real Estate in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Japan Real Estate 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 Japan Real. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Japan Real Estate has no effect on the direction of PT Hexindo i.e., PT Hexindo and Japan Real go up and down completely randomly.
Pair Corralation between PT Hexindo and Japan Real
Assuming the 90 days trading horizon PT Hexindo Adiperkasa is expected to generate 2.84 times more return on investment than Japan Real. However, PT Hexindo is 2.84 times more volatile than Japan Real Estate. It trades about 0.01 of its potential returns per unit of risk. Japan Real Estate is currently generating about -0.03 per unit of risk. If you would invest 32.00 in PT Hexindo Adiperkasa on August 28, 2024 and sell it today you would lose (4.00) from holding PT Hexindo Adiperkasa or give up 12.5% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 99.01% |
| Values | Daily Returns |
PT Hexindo Adiperkasa vs. Japan Real Estate
Performance |
| Timeline |
| PT Hexindo Adiperkasa |
| Japan Real Estate |
PT Hexindo and Japan Real Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with PT Hexindo and Japan Real
The main advantage of trading using opposite PT Hexindo and Japan Real positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if PT Hexindo position performs unexpectedly, Japan Real 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 Japan Real will offset losses from the drop in Japan Real's long position.| PT Hexindo vs. Superior Plus Corp | PT Hexindo vs. NMI Holdings | PT Hexindo vs. Origin Agritech | PT Hexindo vs. SIVERS SEMICONDUCTORS AB |
| Japan Real vs. Superior Plus Corp | Japan Real vs. NMI Holdings | Japan Real vs. Origin Agritech | Japan Real 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 Odds Of Bankruptcy module to get analysis of equity chance of financial distress in the next 2 years.
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