Correlation Between Indorama Synthetics and Indomobil Sukses
Can any of the company-specific risk be diversified away by investing in both Indorama Synthetics and Indomobil Sukses 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 Indomobil Sukses 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 Indomobil Sukses Internasional, you can compare the effects of market volatilities on Indorama Synthetics and Indomobil Sukses 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 Indomobil Sukses. Check out your portfolio center. Please also check ongoing floating volatility patterns of Indorama Synthetics and Indomobil Sukses.
Diversification Opportunities for Indorama Synthetics and Indomobil Sukses
0.54 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Indorama and Indomobil is 0.54. Overlapping area represents the amount of risk that can be diversified away by holding Indorama Synthetics Tbk and Indomobil Sukses Internasional in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Indomobil Sukses Int 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 Indomobil Sukses. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Indomobil Sukses Int has no effect on the direction of Indorama Synthetics i.e., Indorama Synthetics and Indomobil Sukses go up and down completely randomly.
Pair Corralation between Indorama Synthetics and Indomobil Sukses
Assuming the 90 days trading horizon Indorama Synthetics Tbk is expected to under-perform the Indomobil Sukses. But the stock apears to be less risky and, when comparing its historical volatility, Indorama Synthetics Tbk is 1.7 times less risky than Indomobil Sukses. The stock trades about -0.06 of its potential returns per unit of risk. The Indomobil Sukses Internasional is currently generating about 0.02 of returns per unit of risk over similar time horizon. If you would invest 98,252 in Indomobil Sukses Internasional on November 27, 2024 and sell it today you would lose (1,752) from holding Indomobil Sukses Internasional or give up 1.78% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 99.57% |
| Values | Daily Returns |
Indorama Synthetics Tbk vs. Indomobil Sukses Internasional
Performance |
| Timeline |
| Indorama Synthetics Tbk |
| Indomobil Sukses Int |
Indorama Synthetics and Indomobil Sukses Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Indorama Synthetics and Indomobil Sukses
The main advantage of trading using opposite Indorama Synthetics and Indomobil Sukses positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Indorama Synthetics position performs unexpectedly, Indomobil Sukses 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 Indomobil Sukses will offset losses from the drop in Indomobil Sukses' 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 |
| Indomobil Sukses vs. Gajah Tunggal Tbk | Indomobil Sukses vs. Astra Otoparts Tbk | Indomobil Sukses vs. Harum Energy Tbk | Indomobil Sukses vs. Akr Corporindo 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 Sectors module to list of equity sectors categorizing publicly traded companies based on their primary business activities.
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