Correlation Between Impack Pratama and Timah Persero
Can any of the company-specific risk be diversified away by investing in both Impack Pratama and Timah Persero 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 Impack Pratama and Timah Persero into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Impack Pratama Industri and Timah Persero Tbk, you can compare the effects of market volatilities on Impack Pratama and Timah Persero 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 Impack Pratama with a short position of Timah Persero. Check out your portfolio center. Please also check ongoing floating volatility patterns of Impack Pratama and Timah Persero.
Diversification Opportunities for Impack Pratama and Timah Persero
-0.21 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Impack and Timah is -0.21. Overlapping area represents the amount of risk that can be diversified away by holding Impack Pratama Industri and Timah Persero Tbk in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Timah Persero Tbk and Impack Pratama 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 Impack Pratama Industri are associated (or correlated) with Timah Persero. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Timah Persero Tbk has no effect on the direction of Impack Pratama i.e., Impack Pratama and Timah Persero go up and down completely randomly.
Pair Corralation between Impack Pratama and Timah Persero
Assuming the 90 days trading horizon Impack Pratama Industri is expected to generate 0.4 times more return on investment than Timah Persero. However, Impack Pratama Industri is 2.49 times less risky than Timah Persero. It trades about 0.06 of its potential returns per unit of risk. Timah Persero Tbk is currently generating about -0.23 per unit of risk. If you would invest 33,000 in Impack Pratama Industri on September 3, 2024 and sell it today you would earn a total of 600.00 from holding Impack Pratama Industri or generate 1.82% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Impack Pratama Industri vs. Timah Persero Tbk
Performance |
| Timeline |
| Impack Pratama Industri |
| Timah Persero Tbk |
Impack Pratama and Timah Persero Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Impack Pratama and Timah Persero
The main advantage of trading using opposite Impack Pratama and Timah Persero positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Impack Pratama position performs unexpectedly, Timah Persero 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 Timah Persero will offset losses from the drop in Timah Persero's long position.| Impack Pratama vs. Timah Persero Tbk | Impack Pratama vs. Semen Indonesia Persero | Impack Pratama vs. Mitra Pinasthika Mustika | Impack Pratama vs. Jakarta Int Hotels |
| Timah Persero vs. Vale Indonesia Tbk | Timah Persero vs. Aneka Tambang Persero | Timah Persero vs. Bukit Asam Tbk | Timah Persero vs. Perusahaan Gas Negara |
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 Volatility module to check portfolio volatility and analyze historical return density to properly model market risk.
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