Correlation Between PT Indo and Lima Dua
Can any of the company-specific risk be diversified away by investing in both PT Indo and Lima Dua 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 Indo and Lima Dua into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between PT Indo Boga and Lima Dua Lima, you can compare the effects of market volatilities on PT Indo and Lima Dua 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 Indo with a short position of Lima Dua. Check out your portfolio center. Please also check ongoing floating volatility patterns of PT Indo and Lima Dua.
Diversification Opportunities for PT Indo and Lima Dua
Excellent diversification
The 3 months correlation between IBOS and Lima is -0.7. Overlapping area represents the amount of risk that can be diversified away by holding PT Indo Boga and Lima Dua Lima in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Lima Dua Lima and PT Indo 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 Indo Boga are associated (or correlated) with Lima Dua. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Lima Dua Lima has no effect on the direction of PT Indo i.e., PT Indo and Lima Dua go up and down completely randomly.
Pair Corralation between PT Indo and Lima Dua
Assuming the 90 days trading horizon PT Indo Boga is expected to under-perform the Lima Dua. In addition to that, PT Indo is 2.46 times more volatile than Lima Dua Lima. It trades about -0.11 of its total potential returns per unit of risk. Lima Dua Lima is currently generating about 0.02 per unit of volatility. If you would invest 12,400 in Lima Dua Lima on September 1, 2024 and sell it today you would earn a total of 400.00 from holding Lima Dua Lima or generate 3.23% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 99.61% |
| Values | Daily Returns |
PT Indo Boga vs. Lima Dua Lima
Performance |
| Timeline |
| PT Indo Boga |
| Lima Dua Lima |
PT Indo and Lima Dua Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with PT Indo and Lima Dua
The main advantage of trading using opposite PT Indo and Lima Dua positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if PT Indo position performs unexpectedly, Lima Dua 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 Lima Dua will offset losses from the drop in Lima Dua's long position.| PT Indo vs. Indo Pureco Pratama | PT Indo vs. Champ Resto Indonesia | PT Indo vs. Bintang Samudera Mandiri | PT Indo vs. Autopedia Sukses Lestari |
| Lima Dua vs. Imago Mulia Persada | Lima Dua vs. PT Sunter Lakeside | Lima Dua vs. Damai Sejahtera Abadi | Lima Dua vs. Panca Anugrah Wisesa |
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 Portfolio Suggestion module to get suggestions outside of your existing asset allocation including your own model portfolios.
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