Correlation Between Indosat Tbk and Fortune Mate
Can any of the company-specific risk be diversified away by investing in both Indosat Tbk and Fortune Mate 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 Indosat Tbk and Fortune Mate into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Indosat Tbk and Fortune Mate Indonesia, you can compare the effects of market volatilities on Indosat Tbk and Fortune Mate 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 Indosat Tbk with a short position of Fortune Mate. Check out your portfolio center. Please also check ongoing floating volatility patterns of Indosat Tbk and Fortune Mate.
Diversification Opportunities for Indosat Tbk and Fortune Mate
-0.51 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Indosat and Fortune is -0.51. Overlapping area represents the amount of risk that can be diversified away by holding Indosat Tbk and Fortune Mate Indonesia in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Fortune Mate Indonesia and Indosat Tbk 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 Indosat Tbk are associated (or correlated) with Fortune Mate. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Fortune Mate Indonesia has no effect on the direction of Indosat Tbk i.e., Indosat Tbk and Fortune Mate go up and down completely randomly.
Pair Corralation between Indosat Tbk and Fortune Mate
Assuming the 90 days trading horizon Indosat Tbk is expected to generate 26.29 times less return on investment than Fortune Mate. But when comparing it to its historical volatility, Indosat Tbk is 2.69 times less risky than Fortune Mate. It trades about 0.04 of its potential returns per unit of risk. Fortune Mate Indonesia is currently generating about 0.43 of returns per unit of risk over similar time horizon. If you would invest 23,800 in Fortune Mate Indonesia on August 31, 2024 and sell it today you would earn a total of 30,700 from holding Fortune Mate Indonesia or generate 128.99% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Indosat Tbk vs. Fortune Mate Indonesia
Performance |
| Timeline |
| Indosat Tbk |
| Fortune Mate Indonesia |
Indosat Tbk and Fortune Mate Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Indosat Tbk and Fortune Mate
The main advantage of trading using opposite Indosat Tbk and Fortune Mate positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Indosat Tbk position performs unexpectedly, Fortune Mate 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 Fortune Mate will offset losses from the drop in Fortune Mate's long position.| Indosat Tbk vs. Astra Agro Lestari | Indosat Tbk vs. Vale Indonesia Tbk | Indosat Tbk vs. Timah Persero Tbk | Indosat Tbk vs. Medco Energi Internasional |
| Fortune Mate vs. Lippo Cikarang Tbk | Fortune Mate vs. Bekasi Asri Pemula | Fortune Mate vs. Mitra Pinasthika Mustika | Fortune Mate vs. Jakarta Int Hotels |
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 Theme Ratings module to determine theme ratings based on digital equity recommendations. Macroaxis theme ratings are based on combination of fundamental analysis and risk-adjusted market performance.
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