Correlation Between Steel Pipe and Tera Data
Can any of the company-specific risk be diversified away by investing in both Steel Pipe and Tera Data 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 Steel Pipe and Tera Data into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Steel Pipe Industry and Tera Data Indonusa, you can compare the effects of market volatilities on Steel Pipe and Tera Data 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 Steel Pipe with a short position of Tera Data. Check out your portfolio center. Please also check ongoing floating volatility patterns of Steel Pipe and Tera Data.
Diversification Opportunities for Steel Pipe and Tera Data
0.35 | Correlation Coefficient |
Weak diversification
The 3 months correlation between Steel and Tera is 0.35. Overlapping area represents the amount of risk that can be diversified away by holding Steel Pipe Industry and Tera Data Indonusa in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Tera Data Indonusa and Steel Pipe 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 Steel Pipe Industry are associated (or correlated) with Tera Data. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Tera Data Indonusa has no effect on the direction of Steel Pipe i.e., Steel Pipe and Tera Data go up and down completely randomly.
Pair Corralation between Steel Pipe and Tera Data
Assuming the 90 days trading horizon Steel Pipe Industry is expected to under-perform the Tera Data. But the stock apears to be less risky and, when comparing its historical volatility, Steel Pipe Industry is 2.14 times less risky than Tera Data. The stock trades about -0.44 of its potential returns per unit of risk. The Tera Data Indonusa is currently generating about 0.1 of returns per unit of risk over similar time horizon. If you would invest 11,716 in Tera Data Indonusa on August 27, 2024 and sell it today you would earn a total of 384.00 from holding Tera Data Indonusa or generate 3.28% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Steel Pipe Industry vs. Tera Data Indonusa
Performance |
| Timeline |
| Steel Pipe Industry |
| Tera Data Indonusa |
Steel Pipe and Tera Data Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Steel Pipe and Tera Data
The main advantage of trading using opposite Steel Pipe and Tera Data positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Steel Pipe position performs unexpectedly, Tera Data 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 Tera Data will offset losses from the drop in Tera Data's long position.| Steel Pipe vs. Semen Baturaja Persero | Steel Pipe vs. Bekasi Fajar Industrial | Steel Pipe vs. Krakatau Steel Persero | Steel Pipe vs. Saranacentral Bajatama Tbk |
| Tera Data vs. PT Dewi Shri | Tera Data vs. PT Arkora Hydro | Tera Data vs. Habco Trans Maritima | Tera Data vs. PT Jhonlin Agro |
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 Financial Widgets module to easily integrated Macroaxis content with over 30 different plug-and-play financial widgets.
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