Correlation Between Indonesia Fibreboard and Satyamitra Kemas
Can any of the company-specific risk be diversified away by investing in both Indonesia Fibreboard and Satyamitra Kemas 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 Indonesia Fibreboard and Satyamitra Kemas into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Indonesia Fibreboard Industry and Satyamitra Kemas Lestari, you can compare the effects of market volatilities on Indonesia Fibreboard and Satyamitra Kemas 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 Indonesia Fibreboard with a short position of Satyamitra Kemas. Check out your portfolio center. Please also check ongoing floating volatility patterns of Indonesia Fibreboard and Satyamitra Kemas.
Diversification Opportunities for Indonesia Fibreboard and Satyamitra Kemas
-0.24 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Indonesia and Satyamitra is -0.24. Overlapping area represents the amount of risk that can be diversified away by holding Indonesia Fibreboard Industry and Satyamitra Kemas Lestari in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Satyamitra Kemas Lestari and Indonesia Fibreboard 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 Indonesia Fibreboard Industry are associated (or correlated) with Satyamitra Kemas. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Satyamitra Kemas Lestari has no effect on the direction of Indonesia Fibreboard i.e., Indonesia Fibreboard and Satyamitra Kemas go up and down completely randomly.
Pair Corralation between Indonesia Fibreboard and Satyamitra Kemas
Assuming the 90 days trading horizon Indonesia Fibreboard Industry is expected to generate 0.55 times more return on investment than Satyamitra Kemas. However, Indonesia Fibreboard Industry is 1.83 times less risky than Satyamitra Kemas. It trades about 0.06 of its potential returns per unit of risk. Satyamitra Kemas Lestari is currently generating about 0.01 per unit of risk. If you would invest 18,047 in Indonesia Fibreboard Industry on November 3, 2024 and sell it today you would earn a total of 2,553 from holding Indonesia Fibreboard Industry or generate 14.15% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Indonesia Fibreboard Industry vs. Satyamitra Kemas Lestari
Performance |
| Timeline |
| Indonesia Fibreboard |
| Satyamitra Kemas Lestari |
Indonesia Fibreboard and Satyamitra Kemas Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Indonesia Fibreboard and Satyamitra Kemas
The main advantage of trading using opposite Indonesia Fibreboard and Satyamitra Kemas positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Indonesia Fibreboard position performs unexpectedly, Satyamitra Kemas 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 Satyamitra Kemas will offset losses from the drop in Satyamitra Kemas' long position.| Indonesia Fibreboard vs. Gunung Raja Paksi | Indonesia Fibreboard vs. Satyamitra Kemas Lestari | Indonesia Fibreboard vs. Ifishdeco PT | Indonesia Fibreboard vs. Saraswanti Anugerah Makmur |
| Satyamitra Kemas vs. Saraswanti Anugerah Makmur | Satyamitra Kemas vs. Panca Budi Idaman | Satyamitra Kemas vs. Indonesia Fibreboard Industry | Satyamitra Kemas vs. Kencana Energi Lestari |
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 Idea Optimizer module to use advanced portfolio builder with pre-computed micro ideas to build optimal portfolio .
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