Correlation Between Intraco Penta and Tanah Laut
Can any of the company-specific risk be diversified away by investing in both Intraco Penta and Tanah Laut 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 Intraco Penta and Tanah Laut into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Intraco Penta Tbk and Tanah Laut Tbk, you can compare the effects of market volatilities on Intraco Penta and Tanah Laut 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 Intraco Penta with a short position of Tanah Laut. Check out your portfolio center. Please also check ongoing floating volatility patterns of Intraco Penta and Tanah Laut.
Diversification Opportunities for Intraco Penta and Tanah Laut
0.7 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Intraco and Tanah is 0.7. Overlapping area represents the amount of risk that can be diversified away by holding Intraco Penta Tbk and Tanah Laut Tbk in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Tanah Laut Tbk and Intraco Penta 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 Intraco Penta Tbk are associated (or correlated) with Tanah Laut. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Tanah Laut Tbk has no effect on the direction of Intraco Penta i.e., Intraco Penta and Tanah Laut go up and down completely randomly.
Pair Corralation between Intraco Penta and Tanah Laut
Assuming the 90 days trading horizon Intraco Penta Tbk is expected to generate 2.57 times more return on investment than Tanah Laut. However, Intraco Penta is 2.57 times more volatile than Tanah Laut Tbk. It trades about 0.07 of its potential returns per unit of risk. Tanah Laut Tbk is currently generating about 0.01 per unit of risk. 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 |
Intraco Penta Tbk vs. Tanah Laut Tbk
Performance |
| Timeline |
| Intraco Penta Tbk |
| Tanah Laut Tbk |
Intraco Penta and Tanah Laut Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Intraco Penta and Tanah Laut
The main advantage of trading using opposite Intraco Penta and Tanah Laut positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Intraco Penta position performs unexpectedly, Tanah Laut 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 Tanah Laut will offset losses from the drop in Tanah Laut's long position.| Intraco Penta vs. Indonesian Tobacco Tbk | Intraco Penta vs. Ashmore Asset Management | Intraco Penta vs. Communication Cable Systems | Intraco Penta vs. First Media Tbk |
| Tanah Laut vs. Inter Delta Tbk | Tanah Laut vs. Humpuss Intermoda Transportasi | Tanah Laut vs. Fortune Indonesia Tbk | Tanah Laut vs. PT MNC Energy |
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 Commodity Directory module to find actively traded commodities issued by global exchanges.
Other Complementary Tools
| Stocks Directory Find actively traded stocks across global markets | |
| Pair Correlation Compare performance and examine fundamental relationship between any two equity instruments | |
| Equity Forecasting Use basic forecasting models to generate price predictions and determine price momentum | |
| Money Flow Index Determine momentum by analyzing Money Flow Index and other technical indicators | |
| Bonds Directory Find actively traded corporate debentures issued by US companies |