Correlation Between Tanah Laut and Intraco Penta
Can any of the company-specific risk be diversified away by investing in both Tanah Laut and Intraco Penta 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 Tanah Laut and Intraco Penta into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Tanah Laut Tbk and Intraco Penta Tbk, you can compare the effects of market volatilities on Tanah Laut and Intraco Penta 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 Tanah Laut with a short position of Intraco Penta. Check out your portfolio center. Please also check ongoing floating volatility patterns of Tanah Laut and Intraco Penta.
Diversification Opportunities for Tanah Laut and Intraco Penta
0.7 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Tanah and Intraco is 0.7. Overlapping area represents the amount of risk that can be diversified away by holding Tanah Laut Tbk and Intraco Penta Tbk in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Intraco Penta Tbk and Tanah Laut 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 Tanah Laut Tbk are associated (or correlated) with Intraco Penta. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Intraco Penta Tbk has no effect on the direction of Tanah Laut i.e., Tanah Laut and Intraco Penta go up and down completely randomly.
Pair Corralation between Tanah Laut and Intraco Penta
Assuming the 90 days trading horizon Tanah Laut is expected to generate 20.88 times less return on investment than Intraco Penta. But when comparing it to its historical volatility, Tanah Laut Tbk is 2.57 times less risky than Intraco Penta. It trades about 0.01 of its potential returns per unit of risk. Intraco Penta Tbk is currently generating about 0.07 of returns per unit of risk over similar time horizon. If you would invest 800.00 in Intraco Penta Tbk on August 30, 2024 and sell it today you would earn a total of 300.00 from holding Intraco Penta Tbk or generate 37.5% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Together |
Strength | Significant |
Accuracy | 100.0% |
Values | Daily Returns |
Tanah Laut Tbk vs. Intraco Penta Tbk
Performance |
Timeline |
Tanah Laut Tbk |
Intraco Penta Tbk |
Tanah Laut and Intraco Penta Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Tanah Laut and Intraco Penta
The main advantage of trading using opposite Tanah Laut and Intraco Penta positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Tanah Laut position performs unexpectedly, Intraco Penta 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 Intraco Penta will offset losses from the drop in Intraco Penta's long position.Tanah Laut vs. Inter Delta Tbk | Tanah Laut vs. Humpuss Intermoda Transportasi | Tanah Laut vs. Fortune Indonesia Tbk | Tanah Laut vs. PT MNC Energy |
Intraco Penta vs. Indonesian Tobacco Tbk | Intraco Penta vs. Ashmore Asset Management | Intraco Penta vs. Communication Cable Systems | Intraco Penta vs. First Media 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 Price Ceiling Movement module to calculate and plot Price Ceiling Movement for different equity instruments.
Other Complementary Tools
Earnings Calls Check upcoming earnings announcements updated hourly across public exchanges | |
Cryptocurrency Center Build and monitor diversified portfolio of extremely risky digital assets and cryptocurrency | |
Equity Analysis Research over 250,000 global equities including funds, stocks and ETFs to find investment opportunities | |
Stocks Directory Find actively traded stocks across global markets | |
AI Portfolio Architect Use AI to generate optimal portfolios and find profitable investment opportunities |