Correlation Between Hoffmen Cleanindo and Inocycle Technology
Can any of the company-specific risk be diversified away by investing in both Hoffmen Cleanindo and Inocycle Technology 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 Hoffmen Cleanindo and Inocycle Technology into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Hoffmen Cleanindo and Inocycle Technology Tbk, you can compare the effects of market volatilities on Hoffmen Cleanindo and Inocycle Technology 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 Hoffmen Cleanindo with a short position of Inocycle Technology. Check out your portfolio center. Please also check ongoing floating volatility patterns of Hoffmen Cleanindo and Inocycle Technology.
Diversification Opportunities for Hoffmen Cleanindo and Inocycle Technology
-0.04 | Correlation Coefficient |
Good diversification
The 3 months correlation between Hoffmen and Inocycle is -0.04. Overlapping area represents the amount of risk that can be diversified away by holding Hoffmen Cleanindo and Inocycle Technology Tbk in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Inocycle Technology Tbk and Hoffmen Cleanindo 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 Hoffmen Cleanindo are associated (or correlated) with Inocycle Technology. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Inocycle Technology Tbk has no effect on the direction of Hoffmen Cleanindo i.e., Hoffmen Cleanindo and Inocycle Technology go up and down completely randomly.
Pair Corralation between Hoffmen Cleanindo and Inocycle Technology
Assuming the 90 days trading horizon Hoffmen Cleanindo is expected to generate 3.75 times less return on investment than Inocycle Technology. But when comparing it to its historical volatility, Hoffmen Cleanindo is 1.57 times less risky than Inocycle Technology. It trades about 0.04 of its potential returns per unit of risk. Inocycle Technology Tbk is currently generating about 0.09 of returns per unit of risk over similar time horizon. If you would invest 9,100 in Inocycle Technology Tbk on August 30, 2024 and sell it today you would earn a total of 1,000.00 from holding Inocycle Technology Tbk or generate 10.99% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Hoffmen Cleanindo vs. Inocycle Technology Tbk
Performance |
| Timeline |
| Hoffmen Cleanindo |
| Inocycle Technology Tbk |
Hoffmen Cleanindo and Inocycle Technology Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Hoffmen Cleanindo and Inocycle Technology
The main advantage of trading using opposite Hoffmen Cleanindo and Inocycle Technology positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Hoffmen Cleanindo position performs unexpectedly, Inocycle Technology 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 Inocycle Technology will offset losses from the drop in Inocycle Technology's long position.| Hoffmen Cleanindo vs. Surya Citra Media | Hoffmen Cleanindo vs. Indointernet Tbk PT | Hoffmen Cleanindo vs. Grand Kartech Tbk | Hoffmen Cleanindo vs. Ciptadana Asset Management |
| Inocycle Technology vs. Emdeki Utama Tbk | Inocycle Technology vs. Nusantara Almazia | Inocycle Technology vs. Sentral Mitra Informatika | Inocycle Technology vs. Darmi Bersaudara Tbk |
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 Equity Search module to search for actively traded equities including funds and ETFs from over 30 global markets.
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