Correlation Between Hoffmen Cleanindo and Intermedia Capital
Can any of the company-specific risk be diversified away by investing in both Hoffmen Cleanindo and Intermedia Capital 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 Intermedia Capital into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Hoffmen Cleanindo and Intermedia Capital Tbk, you can compare the effects of market volatilities on Hoffmen Cleanindo and Intermedia Capital 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 Intermedia Capital. Check out your portfolio center. Please also check ongoing floating volatility patterns of Hoffmen Cleanindo and Intermedia Capital.
Diversification Opportunities for Hoffmen Cleanindo and Intermedia Capital
0.75 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Hoffmen and Intermedia is 0.75. Overlapping area represents the amount of risk that can be diversified away by holding Hoffmen Cleanindo and Intermedia Capital Tbk in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Intermedia Capital 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 Intermedia Capital. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Intermedia Capital Tbk has no effect on the direction of Hoffmen Cleanindo i.e., Hoffmen Cleanindo and Intermedia Capital go up and down completely randomly.
Pair Corralation between Hoffmen Cleanindo and Intermedia Capital
Assuming the 90 days trading horizon Hoffmen Cleanindo is expected to generate 13.58 times less return on investment than Intermedia Capital. But when comparing it to its historical volatility, Hoffmen Cleanindo is 2.95 times less risky than Intermedia Capital. It trades about 0.23 of its potential returns per unit of risk. Intermedia Capital Tbk is currently generating about 1.08 of returns per unit of risk over similar time horizon. If you would invest 1,800 in Intermedia Capital Tbk on November 27, 2024 and sell it today you would earn a total of 2,600 from holding Intermedia Capital Tbk or generate 144.44% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Hoffmen Cleanindo vs. Intermedia Capital Tbk
Performance |
| Timeline |
| Hoffmen Cleanindo |
| Intermedia Capital Tbk |
Hoffmen Cleanindo and Intermedia Capital Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Hoffmen Cleanindo and Intermedia Capital
The main advantage of trading using opposite Hoffmen Cleanindo and Intermedia Capital positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Hoffmen Cleanindo position performs unexpectedly, Intermedia Capital 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 Intermedia Capital will offset losses from the drop in Intermedia Capital's long position.| Hoffmen Cleanindo vs. Global Mediacom Tbk | Hoffmen Cleanindo vs. Weha Transportasi Indonesia | Hoffmen Cleanindo vs. Mahaka Media Tbk | Hoffmen Cleanindo vs. Inocycle Technology Tbk |
| Intermedia Capital vs. Visi Media Asia | Intermedia Capital vs. Mnc Sky Vision | Intermedia Capital vs. Mahaka Radio Integra | Intermedia Capital vs. Mnc Land 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 Balance Of Power module to check stock momentum by analyzing Balance Of Power indicator and other technical ratios.
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