Correlation Between Intanwijaya Internasional and Sumber Energi
Can any of the company-specific risk be diversified away by investing in both Intanwijaya Internasional and Sumber Energi 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 Sumber Energi 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 Sumber Energi Andalan, you can compare the effects of market volatilities on Intanwijaya Internasional and Sumber Energi 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 Sumber Energi. Check out your portfolio center. Please also check ongoing floating volatility patterns of Intanwijaya Internasional and Sumber Energi.
Diversification Opportunities for Intanwijaya Internasional and Sumber Energi
0.13 | Correlation Coefficient |
Average diversification
The 3 months correlation between Intanwijaya and Sumber is 0.13. Overlapping area represents the amount of risk that can be diversified away by holding Intanwijaya Internasional Tbk and Sumber Energi Andalan in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Sumber Energi Andalan 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 Sumber Energi. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Sumber Energi Andalan has no effect on the direction of Intanwijaya Internasional i.e., Intanwijaya Internasional and Sumber Energi go up and down completely randomly.
Pair Corralation between Intanwijaya Internasional and Sumber Energi
Assuming the 90 days trading horizon Intanwijaya Internasional Tbk is expected to generate 0.52 times more return on investment than Sumber Energi. However, Intanwijaya Internasional Tbk is 1.92 times less risky than Sumber Energi. It trades about -0.12 of its potential returns per unit of risk. Sumber Energi Andalan is currently generating about -0.19 per unit of risk. If you would invest 60,000 in Intanwijaya Internasional Tbk on August 30, 2024 and sell it today you would lose (2,500) from holding Intanwijaya Internasional Tbk or give up 4.17% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Intanwijaya Internasional Tbk vs. Sumber Energi Andalan
Performance |
| Timeline |
| Intanwijaya Internasional |
| Sumber Energi Andalan |
Intanwijaya Internasional and Sumber Energi Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Intanwijaya Internasional and Sumber Energi
The main advantage of trading using opposite Intanwijaya Internasional and Sumber Energi positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Intanwijaya Internasional position performs unexpectedly, Sumber Energi 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 Sumber Energi will offset losses from the drop in Sumber Energi's long position.| Intanwijaya Internasional vs. Barito Pacific Tbk | Intanwijaya Internasional vs. Charoen Pokphand Indonesia | Intanwijaya Internasional vs. Indocement Tunggal Prakarsa |
| Sumber Energi vs. Intanwijaya Internasional Tbk | Sumber Energi vs. Indal Aluminium Industry | Sumber Energi vs. Inter Delta Tbk | Sumber Energi vs. Lionmesh Prima Tbk |
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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