Correlation Between Inti Bangun and Indosat Tbk
Can any of the company-specific risk be diversified away by investing in both Inti Bangun and Indosat Tbk 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 Inti Bangun and Indosat Tbk into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Inti Bangun Sejahtera and Indosat Tbk, you can compare the effects of market volatilities on Inti Bangun and Indosat Tbk 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 Inti Bangun with a short position of Indosat Tbk. Check out your portfolio center. Please also check ongoing floating volatility patterns of Inti Bangun and Indosat Tbk.
Diversification Opportunities for Inti Bangun and Indosat Tbk
0.61 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Inti and Indosat is 0.61. Overlapping area represents the amount of risk that can be diversified away by holding Inti Bangun Sejahtera and Indosat Tbk in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Indosat Tbk and Inti Bangun 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 Inti Bangun Sejahtera are associated (or correlated) with Indosat Tbk. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Indosat Tbk has no effect on the direction of Inti Bangun i.e., Inti Bangun and Indosat Tbk go up and down completely randomly.
Pair Corralation between Inti Bangun and Indosat Tbk
Assuming the 90 days trading horizon Inti Bangun is expected to generate 28.91 times less return on investment than Indosat Tbk. But when comparing it to its historical volatility, Inti Bangun Sejahtera is 1.36 times less risky than Indosat Tbk. It trades about 0.01 of its potential returns per unit of risk. Indosat Tbk is currently generating about 0.22 of returns per unit of risk over similar time horizon. If you would invest 214,000 in Indosat Tbk on September 12, 2024 and sell it today you would earn a total of 31,000 from holding Indosat Tbk or generate 14.49% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 95.24% |
| Values | Daily Returns |
Inti Bangun Sejahtera vs. Indosat Tbk
Performance |
| Timeline |
| Inti Bangun Sejahtera |
| Indosat Tbk |
Inti Bangun and Indosat Tbk Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Inti Bangun and Indosat Tbk
The main advantage of trading using opposite Inti Bangun and Indosat Tbk positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Inti Bangun position performs unexpectedly, Indosat Tbk 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 Indosat Tbk will offset losses from the drop in Indosat Tbk's long position.| Inti Bangun vs. Mnc Land Tbk | Inti Bangun vs. MNC Vision Networks | Inti Bangun vs. MD Pictures Tbk | Inti Bangun vs. Link Net Tbk |
| Indosat Tbk vs. Astra Agro Lestari | Indosat Tbk vs. Vale Indonesia Tbk | Indosat Tbk vs. Timah Persero Tbk | Indosat Tbk vs. Medco Energi Internasional |
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 Pair Correlation module to compare performance and examine fundamental relationship between any two equity instruments.
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