Correlation Between Indorama Synthetics and PT Data
Can any of the company-specific risk be diversified away by investing in both Indorama Synthetics and PT Data 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 Indorama Synthetics and PT Data into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Indorama Synthetics Tbk and PT Data Sinergitama, you can compare the effects of market volatilities on Indorama Synthetics and PT Data 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 Indorama Synthetics with a short position of PT Data. Check out your portfolio center. Please also check ongoing floating volatility patterns of Indorama Synthetics and PT Data.
Diversification Opportunities for Indorama Synthetics and PT Data
-0.52 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Indorama and ELIT is -0.52. Overlapping area represents the amount of risk that can be diversified away by holding Indorama Synthetics Tbk and PT Data Sinergitama in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on PT Data Sinergitama and Indorama Synthetics 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 Indorama Synthetics Tbk are associated (or correlated) with PT Data. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of PT Data Sinergitama has no effect on the direction of Indorama Synthetics i.e., Indorama Synthetics and PT Data go up and down completely randomly.
Pair Corralation between Indorama Synthetics and PT Data
Assuming the 90 days trading horizon Indorama Synthetics Tbk is expected to under-perform the PT Data. But the stock apears to be less risky and, when comparing its historical volatility, Indorama Synthetics Tbk is 4.55 times less risky than PT Data. The stock trades about -0.25 of its potential returns per unit of risk. The PT Data Sinergitama is currently generating about 0.31 of returns per unit of risk over similar time horizon. If you would invest 13,100 in PT Data Sinergitama on November 28, 2024 and sell it today you would earn a total of 8,900 from holding PT Data Sinergitama or generate 67.94% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Indorama Synthetics Tbk vs. PT Data Sinergitama
Performance |
| Timeline |
| Indorama Synthetics Tbk |
| PT Data Sinergitama |
Indorama Synthetics and PT Data Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Indorama Synthetics and PT Data
The main advantage of trading using opposite Indorama Synthetics and PT Data positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Indorama Synthetics position performs unexpectedly, PT Data 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 Data will offset losses from the drop in PT Data's long position.| Indorama Synthetics vs. Indospring Tbk | Indorama Synthetics vs. Indomobil Sukses Internasional | Indorama Synthetics vs. Sumi Indo Kabel | Indorama Synthetics vs. Goodyear Indonesia Tbk |
| PT Data vs. Indofood Cbp Sukses | PT Data vs. Fast Food Indonesia | PT Data vs. Tiphone Mobile Indonesia | PT Data vs. Envy Technologies 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 Balance Of Power module to check stock momentum by analyzing Balance Of Power indicator and other technical ratios.
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