Correlation Between PT Indonesia and Adi Sarana
Can any of the company-specific risk be diversified away by investing in both PT Indonesia and Adi Sarana 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 PT Indonesia and Adi Sarana into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between PT Indonesia Kendaraan and Adi Sarana Armada, you can compare the effects of market volatilities on PT Indonesia and Adi Sarana 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 PT Indonesia with a short position of Adi Sarana. Check out your portfolio center. Please also check ongoing floating volatility patterns of PT Indonesia and Adi Sarana.
Diversification Opportunities for PT Indonesia and Adi Sarana
-0.26 | Correlation Coefficient |
Very good diversification
The 3 months correlation between IPCC and Adi is -0.26. Overlapping area represents the amount of risk that can be diversified away by holding PT Indonesia Kendaraan and Adi Sarana Armada in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Adi Sarana Armada and PT Indonesia 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 PT Indonesia Kendaraan are associated (or correlated) with Adi Sarana. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Adi Sarana Armada has no effect on the direction of PT Indonesia i.e., PT Indonesia and Adi Sarana go up and down completely randomly.
Pair Corralation between PT Indonesia and Adi Sarana
Assuming the 90 days trading horizon PT Indonesia Kendaraan is expected to generate 0.46 times more return on investment than Adi Sarana. However, PT Indonesia Kendaraan is 2.16 times less risky than Adi Sarana. It trades about 0.05 of its potential returns per unit of risk. Adi Sarana Armada is currently generating about -0.01 per unit of risk. If you would invest 62,018 in PT Indonesia Kendaraan on September 14, 2024 and sell it today you would earn a total of 9,482 from holding PT Indonesia Kendaraan or generate 15.29% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
PT Indonesia Kendaraan vs. Adi Sarana Armada
Performance |
| Timeline |
| PT Indonesia Kendaraan |
| Adi Sarana Armada |
PT Indonesia and Adi Sarana Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with PT Indonesia and Adi Sarana
The main advantage of trading using opposite PT Indonesia and Adi Sarana positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if PT Indonesia position performs unexpectedly, Adi Sarana 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 Adi Sarana will offset losses from the drop in Adi Sarana's long position.| PT Indonesia vs. Jasa Armada Indonesia | PT Indonesia vs. Cikarang Listrindo Tbk | PT Indonesia vs. Mitra Pinasthika Mustika | PT Indonesia vs. Wijaya Karya Bangunan |
| Adi Sarana vs. PT Indonesia Kendaraan | Adi Sarana vs. Surya Toto Indonesia | Adi Sarana vs. Mitra Pinasthika Mustika | Adi Sarana vs. Integra Indocabinet 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 Bollinger Bands module to use Bollinger Bands indicator to analyze target price for a given investing horizon.
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