Correlation Between Inocycle Technology and Steel Pipe
Can any of the company-specific risk be diversified away by investing in both Inocycle Technology and Steel Pipe 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 Inocycle Technology and Steel Pipe into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Inocycle Technology Tbk and Steel Pipe Industry, you can compare the effects of market volatilities on Inocycle Technology and Steel Pipe 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 Inocycle Technology with a short position of Steel Pipe. Check out your portfolio center. Please also check ongoing floating volatility patterns of Inocycle Technology and Steel Pipe.
Diversification Opportunities for Inocycle Technology and Steel Pipe
-0.27 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Inocycle and Steel is -0.27. Overlapping area represents the amount of risk that can be diversified away by holding Inocycle Technology Tbk and Steel Pipe Industry in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Steel Pipe Industry and Inocycle Technology 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 Inocycle Technology Tbk are associated (or correlated) with Steel Pipe. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Steel Pipe Industry has no effect on the direction of Inocycle Technology i.e., Inocycle Technology and Steel Pipe go up and down completely randomly.
Pair Corralation between Inocycle Technology and Steel Pipe
Assuming the 90 days trading horizon Inocycle Technology Tbk is expected to under-perform the Steel Pipe. In addition to that, Inocycle Technology is 2.41 times more volatile than Steel Pipe Industry. It trades about 0.0 of its total potential returns per unit of risk. Steel Pipe Industry is currently generating about 0.03 per unit of volatility. If you would invest 24,348 in Steel Pipe Industry on August 26, 2024 and sell it today you would earn a total of 4,252 from holding Steel Pipe Industry or generate 17.46% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Inocycle Technology Tbk vs. Steel Pipe Industry
Performance |
| Timeline |
| Inocycle Technology Tbk |
| Steel Pipe Industry |
Inocycle Technology and Steel Pipe Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Inocycle Technology and Steel Pipe
The main advantage of trading using opposite Inocycle Technology and Steel Pipe positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Inocycle Technology position performs unexpectedly, Steel Pipe 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 Steel Pipe will offset losses from the drop in Steel Pipe's long position.| Inocycle Technology vs. Emdeki Utama Tbk | Inocycle Technology vs. Nusantara Almazia | Inocycle Technology vs. Sentral Mitra Informatika | Inocycle Technology vs. Integra Indocabinet Tbk |
| Steel Pipe vs. Semen Baturaja Persero | Steel Pipe vs. Bekasi Fajar Industrial | Steel Pipe vs. Krakatau Steel Persero | Steel Pipe vs. Saranacentral Bajatama 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 Performance Analysis module to check effects of mean-variance optimization against your current asset allocation.
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