Correlation Between Inocycle Technology and Krakatau Steel
Can any of the company-specific risk be diversified away by investing in both Inocycle Technology and Krakatau Steel 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 Krakatau Steel 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 Krakatau Steel Persero, you can compare the effects of market volatilities on Inocycle Technology and Krakatau Steel 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 Krakatau Steel. Check out your portfolio center. Please also check ongoing floating volatility patterns of Inocycle Technology and Krakatau Steel.
Diversification Opportunities for Inocycle Technology and Krakatau Steel
-0.34 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Inocycle and Krakatau is -0.34. Overlapping area represents the amount of risk that can be diversified away by holding Inocycle Technology Tbk and Krakatau Steel Persero in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Krakatau Steel Persero 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 Krakatau Steel. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Krakatau Steel Persero has no effect on the direction of Inocycle Technology i.e., Inocycle Technology and Krakatau Steel go up and down completely randomly.
Pair Corralation between Inocycle Technology and Krakatau Steel
Assuming the 90 days trading horizon Inocycle Technology Tbk is expected to generate 1.38 times more return on investment than Krakatau Steel. However, Inocycle Technology is 1.38 times more volatile than Krakatau Steel Persero. It trades about 0.0 of its potential returns per unit of risk. Krakatau Steel Persero is currently generating about -0.07 per unit of risk. If you would invest 14,700 in Inocycle Technology Tbk on August 26, 2024 and sell it today you would lose (4,700) from holding Inocycle Technology Tbk or give up 31.97% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Inocycle Technology Tbk vs. Krakatau Steel Persero
Performance |
| Timeline |
| Inocycle Technology Tbk |
| Krakatau Steel Persero |
Inocycle Technology and Krakatau Steel Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Inocycle Technology and Krakatau Steel
The main advantage of trading using opposite Inocycle Technology and Krakatau Steel positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Inocycle Technology position performs unexpectedly, Krakatau Steel 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 Krakatau Steel will offset losses from the drop in Krakatau Steel'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 |
| Krakatau Steel vs. Kedaung Indah Can | Krakatau Steel vs. Langgeng Makmur Industri | Krakatau Steel vs. Kabelindo Murni Tbk | Krakatau Steel vs. Mustika Ratu 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 Headlines Timeline module to stay connected to all market stories and filter out noise. Drill down to analyze hype elasticity.
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