Correlation Between Indorama Synthetics and Tempo Inti
Can any of the company-specific risk be diversified away by investing in both Indorama Synthetics and Tempo Inti 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 Tempo Inti 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 Tempo Inti Media, you can compare the effects of market volatilities on Indorama Synthetics and Tempo Inti 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 Tempo Inti. Check out your portfolio center. Please also check ongoing floating volatility patterns of Indorama Synthetics and Tempo Inti.
Diversification Opportunities for Indorama Synthetics and Tempo Inti
0.78 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Indorama and Tempo is 0.78. Overlapping area represents the amount of risk that can be diversified away by holding Indorama Synthetics Tbk and Tempo Inti Media in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Tempo Inti Media 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 Tempo Inti. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Tempo Inti Media has no effect on the direction of Indorama Synthetics i.e., Indorama Synthetics and Tempo Inti go up and down completely randomly.
Pair Corralation between Indorama Synthetics and Tempo Inti
Assuming the 90 days trading horizon Indorama Synthetics Tbk is expected to generate 0.37 times more return on investment than Tempo Inti. However, Indorama Synthetics Tbk is 2.68 times less risky than Tempo Inti. It trades about -0.4 of its potential returns per unit of risk. Tempo Inti Media is currently generating about -0.3 per unit of risk. If you would invest 311,000 in Indorama Synthetics Tbk on August 29, 2024 and sell it today you would lose (46,000) from holding Indorama Synthetics Tbk or give up 14.79% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Indorama Synthetics Tbk vs. Tempo Inti Media
Performance |
| Timeline |
| Indorama Synthetics Tbk |
| Tempo Inti Media |
Indorama Synthetics and Tempo Inti Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Indorama Synthetics and Tempo Inti
The main advantage of trading using opposite Indorama Synthetics and Tempo Inti positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Indorama Synthetics position performs unexpectedly, Tempo Inti 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 Tempo Inti will offset losses from the drop in Tempo Inti's long position.| Indorama Synthetics vs. Pembangunan Jaya Ancol | Indorama Synthetics vs. Panorama Sentrawisata Tbk | Indorama Synthetics vs. Millennium Pharmacon International | Indorama Synthetics vs. Tempo Inti Media |
| Tempo Inti vs. Bank Artos Indonesia | Tempo Inti vs. PT Bukalapak | Tempo Inti vs. Sumber Alfaria Trijaya | Tempo Inti vs. Merdeka Copper Gold |
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 Companies Directory module to evaluate performance of over 100,000 Stocks, Funds, and ETFs against different fundamentals.
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