Correlation Between Inocycle Technology and PT Boston
Can any of the company-specific risk be diversified away by investing in both Inocycle Technology and PT Boston 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 PT Boston 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 PT Boston Furniture, you can compare the effects of market volatilities on Inocycle Technology and PT Boston 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 PT Boston. Check out your portfolio center. Please also check ongoing floating volatility patterns of Inocycle Technology and PT Boston.
Diversification Opportunities for Inocycle Technology and PT Boston
0.37 | Correlation Coefficient |
Weak diversification
The 3 months correlation between Inocycle and SOFA is 0.37. Overlapping area represents the amount of risk that can be diversified away by holding Inocycle Technology Tbk and PT Boston Furniture in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on PT Boston Furniture 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 PT Boston. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of PT Boston Furniture has no effect on the direction of Inocycle Technology i.e., Inocycle Technology and PT Boston go up and down completely randomly.
Pair Corralation between Inocycle Technology and PT Boston
Assuming the 90 days trading horizon Inocycle Technology is expected to generate 9.69 times less return on investment than PT Boston. But when comparing it to its historical volatility, Inocycle Technology Tbk is 1.31 times less risky than PT Boston. It trades about 0.04 of its potential returns per unit of risk. PT Boston Furniture is currently generating about 0.31 of returns per unit of risk over similar time horizon. If you would invest 1,800 in PT Boston Furniture on September 3, 2024 and sell it today you would earn a total of 1,800 from holding PT Boston Furniture or generate 100.0% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Inocycle Technology Tbk vs. PT Boston Furniture
Performance |
| Timeline |
| Inocycle Technology Tbk |
| PT Boston Furniture |
Inocycle Technology and PT Boston Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Inocycle Technology and PT Boston
The main advantage of trading using opposite Inocycle Technology and PT Boston positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Inocycle Technology position performs unexpectedly, PT Boston 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 PT Boston will offset losses from the drop in PT Boston's long position.| Inocycle Technology vs. Mitra Pinasthika Mustika | Inocycle Technology vs. Jakarta Int Hotels | Inocycle Technology vs. Asuransi Harta Aman | Inocycle Technology vs. Indosterling Technomedia Tbk |
| PT Boston vs. Mitra Pinasthika Mustika | PT Boston vs. Jakarta Int Hotels | PT Boston vs. Indosat Tbk | PT Boston vs. Inocycle Technology 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 Watchlist Optimization module to optimize watchlists to build efficient portfolios or rebalance existing positions based on the mean-variance optimization algorithm.
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