Correlation Between Indosat Tbk and Verena Multi
Can any of the company-specific risk be diversified away by investing in both Indosat Tbk and Verena Multi 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 Verena Multi into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Indosat Tbk and Verena Multi Finance, you can compare the effects of market volatilities on Indosat Tbk and Verena Multi 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 Verena Multi. Check out your portfolio center. Please also check ongoing floating volatility patterns of Indosat Tbk and Verena Multi.
Diversification Opportunities for Indosat Tbk and Verena Multi
0.4 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Indosat and Verena is 0.4. Overlapping area represents the amount of risk that can be diversified away by holding Indosat Tbk and Verena Multi Finance in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Verena Multi Finance 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 Verena Multi. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Verena Multi Finance has no effect on the direction of Indosat Tbk i.e., Indosat Tbk and Verena Multi go up and down completely randomly.
Pair Corralation between Indosat Tbk and Verena Multi
Assuming the 90 days trading horizon Indosat Tbk is expected to generate 2.17 times more return on investment than Verena Multi. However, Indosat Tbk is 2.17 times more volatile than Verena Multi Finance. It trades about 0.08 of its potential returns per unit of risk. Verena Multi Finance is currently generating about -0.05 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 | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Indosat Tbk vs. Verena Multi Finance
Performance |
| Timeline |
| Indosat Tbk |
| Verena Multi Finance |
Indosat Tbk and Verena Multi Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Indosat Tbk and Verena Multi
The main advantage of trading using opposite Indosat Tbk and Verena Multi positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Indosat Tbk position performs unexpectedly, Verena Multi 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 Verena Multi will offset losses from the drop in Verena Multi'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 |
| Verena Multi vs. Bank Cimb Niaga | Verena Multi vs. Indosat Tbk | Verena Multi vs. Astra Agro Lestari | Verena Multi 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 Price Exposure Probability module to analyze equity upside and downside potential for a given time horizon across multiple markets.
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