Correlation Between Indonesia Fibreboard and PT Winner
Can any of the company-specific risk be diversified away by investing in both Indonesia Fibreboard and PT Winner 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 PT Winner 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 PT Winner Nusantara, you can compare the effects of market volatilities on Indonesia Fibreboard and PT Winner 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 PT Winner. Check out your portfolio center. Please also check ongoing floating volatility patterns of Indonesia Fibreboard and PT Winner.
Diversification Opportunities for Indonesia Fibreboard and PT Winner
-0.56 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Indonesia and WINR is -0.56. Overlapping area represents the amount of risk that can be diversified away by holding Indonesia Fibreboard Industry and PT Winner Nusantara in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on PT Winner Nusantara 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 PT Winner. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of PT Winner Nusantara has no effect on the direction of Indonesia Fibreboard i.e., Indonesia Fibreboard and PT Winner go up and down completely randomly.
Pair Corralation between Indonesia Fibreboard and PT Winner
Assuming the 90 days trading horizon Indonesia Fibreboard is expected to generate 2.22 times less return on investment than PT Winner. But when comparing it to its historical volatility, Indonesia Fibreboard Industry is 2.01 times less risky than PT Winner. It trades about 0.04 of its potential returns per unit of risk. PT Winner Nusantara is currently generating about 0.05 of returns per unit of risk over similar time horizon. If you would invest 1,200 in PT Winner Nusantara on September 1, 2024 and sell it today you would earn a total of 200.00 from holding PT Winner Nusantara or generate 16.67% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Indonesia Fibreboard Industry vs. PT Winner Nusantara
Performance |
| Timeline |
| Indonesia Fibreboard |
| PT Winner Nusantara |
Indonesia Fibreboard and PT Winner Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Indonesia Fibreboard and PT Winner
The main advantage of trading using opposite Indonesia Fibreboard and PT Winner positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Indonesia Fibreboard position performs unexpectedly, PT Winner 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 PT Winner will offset losses from the drop in PT Winner's long position.| Indonesia Fibreboard vs. Slj Global Tbk | Indonesia Fibreboard vs. Integra Indocabinet Tbk | Indonesia Fibreboard vs. Multistrada Arah Sarana | Indonesia Fibreboard vs. PT MNC Energy |
| PT Winner vs. Pollux Properti Indonesia | PT Winner vs. Jaya Sukses Makmur | PT Winner vs. Natura City Developments | PT Winner vs. Maha Properti Indonesia |
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 Economic Indicators module to top statistical indicators that provide insights into how an economy is performing.
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