Correlation Between Intanwijaya Internasional and Mark Dynamics
Can any of the company-specific risk be diversified away by investing in both Intanwijaya Internasional and Mark Dynamics 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 Mark Dynamics 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 Mark Dynamics Indonesia, you can compare the effects of market volatilities on Intanwijaya Internasional and Mark Dynamics 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 Mark Dynamics. Check out your portfolio center. Please also check ongoing floating volatility patterns of Intanwijaya Internasional and Mark Dynamics.
Diversification Opportunities for Intanwijaya Internasional and Mark Dynamics
0.29 | Correlation Coefficient |
Modest diversification
The 3 months correlation between Intanwijaya and Mark is 0.29. Overlapping area represents the amount of risk that can be diversified away by holding Intanwijaya Internasional Tbk and Mark Dynamics Indonesia in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Mark Dynamics Indonesia 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 Mark Dynamics. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Mark Dynamics Indonesia has no effect on the direction of Intanwijaya Internasional i.e., Intanwijaya Internasional and Mark Dynamics go up and down completely randomly.
Pair Corralation between Intanwijaya Internasional and Mark Dynamics
Assuming the 90 days trading horizon Intanwijaya Internasional is expected to generate 176.0 times less return on investment than Mark Dynamics. But when comparing it to its historical volatility, Intanwijaya Internasional Tbk is 1.64 times less risky than Mark Dynamics. It trades about 0.0 of its potential returns per unit of risk. Mark Dynamics Indonesia is currently generating about 0.06 of returns per unit of risk over similar time horizon. If you would invest 52,902 in Mark Dynamics Indonesia on November 19, 2024 and sell it today you would earn a total of 40,098 from holding Mark Dynamics Indonesia or generate 75.8% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 99.57% |
| Values | Daily Returns |
Intanwijaya Internasional Tbk vs. Mark Dynamics Indonesia
Performance |
| Timeline |
| Intanwijaya Internasional |
| Mark Dynamics Indonesia |
Intanwijaya Internasional and Mark Dynamics Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Intanwijaya Internasional and Mark Dynamics
The main advantage of trading using opposite Intanwijaya Internasional and Mark Dynamics positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Intanwijaya Internasional position performs unexpectedly, Mark Dynamics 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 Mark Dynamics will offset losses from the drop in Mark Dynamics' long position.The idea behind Intanwijaya Internasional Tbk and Mark Dynamics Indonesia pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.
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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 Odds Of Bankruptcy module to get analysis of equity chance of financial distress in the next 2 years.
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