Correlation Between Ictsi Jasa and Indo Kordsa
Can any of the company-specific risk be diversified away by investing in both Ictsi Jasa and Indo Kordsa 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 Ictsi Jasa and Indo Kordsa into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Ictsi Jasa Prima and Indo Kordsa Tbk, you can compare the effects of market volatilities on Ictsi Jasa and Indo Kordsa 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 Ictsi Jasa with a short position of Indo Kordsa. Check out your portfolio center. Please also check ongoing floating volatility patterns of Ictsi Jasa and Indo Kordsa.
Diversification Opportunities for Ictsi Jasa and Indo Kordsa
0.63 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Ictsi and Indo is 0.63. Overlapping area represents the amount of risk that can be diversified away by holding Ictsi Jasa Prima and Indo Kordsa Tbk in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Indo Kordsa Tbk and Ictsi Jasa 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 Ictsi Jasa Prima are associated (or correlated) with Indo Kordsa. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Indo Kordsa Tbk has no effect on the direction of Ictsi Jasa i.e., Ictsi Jasa and Indo Kordsa go up and down completely randomly.
Pair Corralation between Ictsi Jasa and Indo Kordsa
Assuming the 90 days trading horizon Ictsi Jasa Prima is expected to generate 3.2 times more return on investment than Indo Kordsa. However, Ictsi Jasa is 3.2 times more volatile than Indo Kordsa Tbk. It trades about 0.14 of its potential returns per unit of risk. Indo Kordsa Tbk is currently generating about -0.02 per unit of risk. If you would invest 7,800 in Ictsi Jasa Prima on October 9, 2024 and sell it today you would earn a total of 139,200 from holding Ictsi Jasa Prima or generate 1784.62% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 99.79% |
| Values | Daily Returns |
Ictsi Jasa Prima vs. Indo Kordsa Tbk
Performance |
| Timeline |
| Ictsi Jasa Prima |
| Indo Kordsa Tbk |
Ictsi Jasa and Indo Kordsa Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Ictsi Jasa and Indo Kordsa
The main advantage of trading using opposite Ictsi Jasa and Indo Kordsa positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Ictsi Jasa position performs unexpectedly, Indo Kordsa 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 Indo Kordsa will offset losses from the drop in Indo Kordsa's long position.| Ictsi Jasa vs. Kabelindo Murni Tbk | Ictsi Jasa vs. Jembo Cable | Ictsi Jasa vs. Kedaung Indah Can | Ictsi Jasa vs. Kedawung Setia Industrial |
| Indo Kordsa vs. Pan Brothers Tbk | Indo Kordsa vs. Asia Pacific Fibers | Indo Kordsa vs. Asia Pacific Investama |
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 Watchlist Optimization module to optimize watchlists to build efficient portfolios or rebalance existing positions based on the mean-variance optimization algorithm.
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