Correlation Between PT Hexindo and Carsales
Can any of the company-specific risk be diversified away by investing in both PT Hexindo and Carsales 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 Carsales 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 Carsales, you can compare the effects of market volatilities on PT Hexindo and Carsales 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 Carsales. Check out your portfolio center. Please also check ongoing floating volatility patterns of PT Hexindo and Carsales.
Diversification Opportunities for PT Hexindo and Carsales
-0.27 | Correlation Coefficient |
Very good diversification
The 3 months correlation between HX1A and Carsales is -0.27. Overlapping area represents the amount of risk that can be diversified away by holding PT Hexindo Adiperkasa and Carsales in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Carsales 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 Carsales. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Carsales has no effect on the direction of PT Hexindo i.e., PT Hexindo and Carsales go up and down completely randomly.
Pair Corralation between PT Hexindo and Carsales
Assuming the 90 days trading horizon PT Hexindo Adiperkasa is expected to under-perform the Carsales. In addition to that, PT Hexindo is 3.11 times more volatile than Carsales. It trades about -0.01 of its total potential returns per unit of risk. Carsales is currently generating about 0.12 per unit of volatility. If you would invest 1,907 in Carsales on November 4, 2024 and sell it today you would earn a total of 513.00 from holding Carsales or generate 26.9% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
PT Hexindo Adiperkasa vs. Carsales
Performance |
| Timeline |
| PT Hexindo Adiperkasa |
| Carsales |
PT Hexindo and Carsales Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with PT Hexindo and Carsales
The main advantage of trading using opposite PT Hexindo and Carsales positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if PT Hexindo position performs unexpectedly, Carsales 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 Carsales will offset losses from the drop in Carsales' long position.| PT Hexindo vs. ASURE SOFTWARE | PT Hexindo vs. AIR LIQUIDE ADR | PT Hexindo vs. Wayside Technology Group | PT Hexindo vs. Alaska Air Group |
| Carsales vs. Major Drilling Group | Carsales vs. Information Services International Dentsu | Carsales vs. Automatic Data Processing | Carsales vs. FIRST SHIP LEASE |
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 Balance Of Power module to check stock momentum by analyzing Balance Of Power indicator and other technical ratios.
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