Correlation Between INDOSAT -B- and Apple
Can any of the company-specific risk be diversified away by investing in both INDOSAT -B- and Apple 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 INDOSAT -B- and Apple into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between INDOSAT B and Apple Inc, you can compare the effects of market volatilities on INDOSAT -B- and Apple 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 INDOSAT -B- with a short position of Apple. Check out your portfolio center. Please also check ongoing floating volatility patterns of INDOSAT -B- and Apple.
Diversification Opportunities for INDOSAT -B- and Apple
0.41 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between INDOSAT and Apple is 0.41. Overlapping area represents the amount of risk that can be diversified away by holding INDOSAT B and Apple Inc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Apple Inc and INDOSAT -B- 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 INDOSAT B are associated (or correlated) with Apple. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Apple Inc has no effect on the direction of INDOSAT -B- i.e., INDOSAT -B- and Apple go up and down completely randomly.
Pair Corralation between INDOSAT -B- and Apple
Assuming the 90 days trading horizon INDOSAT B is expected to generate 11.02 times more return on investment than Apple. However, INDOSAT -B- is 11.02 times more volatile than Apple Inc. It trades about 0.06 of its potential returns per unit of risk. Apple Inc is currently generating about -0.49 per unit of risk. If you would invest 13.00 in INDOSAT B on October 23, 2024 and sell it today you would lose (1.00) from holding INDOSAT B or give up 7.69% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
INDOSAT B vs. Apple Inc
Performance |
| Timeline |
| INDOSAT -B- |
| Apple Inc |
INDOSAT -B- and Apple Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with INDOSAT -B- and Apple
The main advantage of trading using opposite INDOSAT -B- and Apple positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if INDOSAT -B- position performs unexpectedly, Apple 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 Apple will offset losses from the drop in Apple's long position.| INDOSAT -B- vs. THAI BEVERAGE | INDOSAT -B- vs. Plastic Omnium | INDOSAT -B- vs. Vulcan Materials | INDOSAT -B- vs. Monster Beverage Corp |
| Apple vs. T MOBILE US | Apple vs. Highlight Communications AG | Apple vs. Forsys Metals Corp | Apple vs. GEELY AUTOMOBILE |
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 Performance Analysis module to check effects of mean-variance optimization against your current asset allocation.
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