Correlation Between Indosat Tbk and Victoria Insurance
Can any of the company-specific risk be diversified away by investing in both Indosat Tbk and Victoria Insurance 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 Victoria Insurance into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Indosat Tbk and Victoria Insurance Tbk, you can compare the effects of market volatilities on Indosat Tbk and Victoria Insurance 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 Victoria Insurance. Check out your portfolio center. Please also check ongoing floating volatility patterns of Indosat Tbk and Victoria Insurance.
Diversification Opportunities for Indosat Tbk and Victoria Insurance
0.67 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Indosat and Victoria is 0.67. Overlapping area represents the amount of risk that can be diversified away by holding Indosat Tbk and Victoria Insurance Tbk in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Victoria Insurance Tbk 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 Victoria Insurance. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Victoria Insurance Tbk has no effect on the direction of Indosat Tbk i.e., Indosat Tbk and Victoria Insurance go up and down completely randomly.
Pair Corralation between Indosat Tbk and Victoria Insurance
Assuming the 90 days trading horizon Indosat Tbk is expected to generate 2.86 times more return on investment than Victoria Insurance. However, Indosat Tbk is 2.86 times more volatile than Victoria Insurance Tbk. It trades about 0.08 of its potential returns per unit of risk. Victoria Insurance Tbk is currently generating about -0.18 per unit of risk. If you would invest 232,000 in Indosat Tbk on August 30, 2024 and sell it today you would earn a total of 12,000 from holding Indosat Tbk or generate 5.17% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Indosat Tbk vs. Victoria Insurance Tbk
Performance |
| Timeline |
| Indosat Tbk |
| Victoria Insurance Tbk |
Indosat Tbk and Victoria Insurance Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Indosat Tbk and Victoria Insurance
The main advantage of trading using opposite Indosat Tbk and Victoria Insurance positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Indosat Tbk position performs unexpectedly, Victoria Insurance 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 Victoria Insurance will offset losses from the drop in Victoria Insurance's long position.| Indosat Tbk vs. Bank Artos Indonesia | Indosat Tbk vs. PT Bukalapak | Indosat Tbk vs. Sumber Alfaria Trijaya | Indosat Tbk vs. Merdeka Copper Gold |
| Victoria Insurance vs. Bank Cimb Niaga | Victoria Insurance vs. Indosat Tbk | Victoria Insurance vs. Astra Agro Lestari | Victoria Insurance vs. Bank Mandiri Persero |
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 ETF Categories module to list of ETF categories grouped based on various criteria, such as the investment strategy or type of investments.
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