Correlation Between Intanwijaya Internasional and Ekadharma International
Can any of the company-specific risk be diversified away by investing in both Intanwijaya Internasional and Ekadharma International 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 Intanwijaya Internasional and Ekadharma International into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Intanwijaya Internasional Tbk and Ekadharma International Tbk, you can compare the effects of market volatilities on Intanwijaya Internasional and Ekadharma International 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 Intanwijaya Internasional with a short position of Ekadharma International. Check out your portfolio center. Please also check ongoing floating volatility patterns of Intanwijaya Internasional and Ekadharma International.
Diversification Opportunities for Intanwijaya Internasional and Ekadharma International
-0.12 | Correlation Coefficient |
Good diversification
The 3 months correlation between Intanwijaya and Ekadharma is -0.12. Overlapping area represents the amount of risk that can be diversified away by holding Intanwijaya Internasional Tbk and Ekadharma International Tbk in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Ekadharma International and Intanwijaya Internasional 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 Intanwijaya Internasional Tbk are associated (or correlated) with Ekadharma International. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Ekadharma International has no effect on the direction of Intanwijaya Internasional i.e., Intanwijaya Internasional and Ekadharma International go up and down completely randomly.
Pair Corralation between Intanwijaya Internasional and Ekadharma International
Assuming the 90 days trading horizon Intanwijaya Internasional Tbk is expected to under-perform the Ekadharma International. In addition to that, Intanwijaya Internasional is 1.41 times more volatile than Ekadharma International Tbk. It trades about -0.12 of its total potential returns per unit of risk. Ekadharma International Tbk is currently generating about -0.11 per unit of volatility. If you would invest 23,000 in Ekadharma International Tbk on August 28, 2024 and sell it today you would lose (600.00) from holding Ekadharma International Tbk or give up 2.61% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Intanwijaya Internasional Tbk vs. Ekadharma International Tbk
Performance |
| Timeline |
| Intanwijaya Internasional |
| Ekadharma International |
Intanwijaya Internasional and Ekadharma International Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Intanwijaya Internasional and Ekadharma International
The main advantage of trading using opposite Intanwijaya Internasional and Ekadharma International positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Intanwijaya Internasional position performs unexpectedly, Ekadharma International 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 Ekadharma International will offset losses from the drop in Ekadharma International's long position.| Intanwijaya Internasional vs. Kedaung Indah Can | Intanwijaya Internasional vs. Langgeng Makmur Industri | Intanwijaya Internasional vs. Kabelindo Murni Tbk | Intanwijaya Internasional vs. Mustika Ratu Tbk |
| Ekadharma International vs. Rukun Raharja Tbk | Ekadharma International vs. Weha Transportasi 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 Fundamentals Comparison module to compare fundamentals across multiple equities to find investing opportunities.
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