Correlation Between Indospring Tbk and Selamat Sempurna
Can any of the company-specific risk be diversified away by investing in both Indospring Tbk and Selamat Sempurna 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 Indospring Tbk and Selamat Sempurna into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Indospring Tbk and Selamat Sempurna Tbk, you can compare the effects of market volatilities on Indospring Tbk and Selamat Sempurna 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 Indospring Tbk with a short position of Selamat Sempurna. Check out your portfolio center. Please also check ongoing floating volatility patterns of Indospring Tbk and Selamat Sempurna.
Diversification Opportunities for Indospring Tbk and Selamat Sempurna
0.61 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Indospring and Selamat is 0.61. Overlapping area represents the amount of risk that can be diversified away by holding Indospring Tbk and Selamat Sempurna Tbk in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Selamat Sempurna Tbk and Indospring Tbk 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 Indospring Tbk are associated (or correlated) with Selamat Sempurna. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Selamat Sempurna Tbk has no effect on the direction of Indospring Tbk i.e., Indospring Tbk and Selamat Sempurna go up and down completely randomly.
Pair Corralation between Indospring Tbk and Selamat Sempurna
Assuming the 90 days trading horizon Indospring Tbk is expected to under-perform the Selamat Sempurna. In addition to that, Indospring Tbk is 1.18 times more volatile than Selamat Sempurna Tbk. It trades about -0.35 of its total potential returns per unit of risk. Selamat Sempurna Tbk is currently generating about 0.02 per unit of volatility. If you would invest 188,926 in Selamat Sempurna Tbk on August 30, 2024 and sell it today you would earn a total of 574.00 from holding Selamat Sempurna Tbk or generate 0.3% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Indospring Tbk vs. Selamat Sempurna Tbk
Performance |
| Timeline |
| Indospring Tbk |
| Selamat Sempurna Tbk |
Indospring Tbk and Selamat Sempurna Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Indospring Tbk and Selamat Sempurna
The main advantage of trading using opposite Indospring Tbk and Selamat Sempurna positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Indospring Tbk position performs unexpectedly, Selamat Sempurna 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 Selamat Sempurna will offset losses from the drop in Selamat Sempurna's long position.| Indospring Tbk vs. Indomobil Sukses Internasional | Indospring Tbk vs. Goodyear Indonesia Tbk | Indospring Tbk vs. Indorama Synthetics Tbk | Indospring Tbk vs. Astra Otoparts Tbk |
| Selamat Sempurna vs. Pembangunan Jaya Ancol | Selamat Sempurna vs. Panorama Sentrawisata Tbk | Selamat Sempurna vs. Millennium Pharmacon International | Selamat Sempurna vs. Tempo Inti Media |
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 Sign In To Macroaxis module to sign in to explore Macroaxis' wealth optimization platform and fintech modules.
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