Correlation Between PT UBC and Steel Pipe
Can any of the company-specific risk be diversified away by investing in both PT UBC and Steel Pipe 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 PT UBC and Steel Pipe into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between PT UBC Medical and Steel Pipe Industry, you can compare the effects of market volatilities on PT UBC and Steel Pipe 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 PT UBC with a short position of Steel Pipe. Check out your portfolio center. Please also check ongoing floating volatility patterns of PT UBC and Steel Pipe.
Diversification Opportunities for PT UBC and Steel Pipe
0.68 | Correlation Coefficient |
Poor diversification
The 3 months correlation between LABS and Steel is 0.68. Overlapping area represents the amount of risk that can be diversified away by holding PT UBC Medical and Steel Pipe Industry in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Steel Pipe Industry and PT UBC 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 PT UBC Medical are associated (or correlated) with Steel Pipe. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Steel Pipe Industry has no effect on the direction of PT UBC i.e., PT UBC and Steel Pipe go up and down completely randomly.
Pair Corralation between PT UBC and Steel Pipe
Assuming the 90 days trading horizon PT UBC Medical is expected to under-perform the Steel Pipe. In addition to that, PT UBC is 1.99 times more volatile than Steel Pipe Industry. It trades about -0.32 of its total potential returns per unit of risk. Steel Pipe Industry is currently generating about -0.3 per unit of volatility. If you would invest 30,200 in Steel Pipe Industry on September 4, 2024 and sell it today you would lose (2,000) from holding Steel Pipe Industry or give up 6.62% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
PT UBC Medical vs. Steel Pipe Industry
Performance |
| Timeline |
| PT UBC Medical |
| Steel Pipe Industry |
PT UBC and Steel Pipe Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with PT UBC and Steel Pipe
The main advantage of trading using opposite PT UBC and Steel Pipe positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if PT UBC position performs unexpectedly, Steel Pipe 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 Steel Pipe will offset losses from the drop in Steel Pipe's long position.| PT UBC vs. Chandra Asri Petrochemical | PT UBC vs. Bank Negara Indonesia | PT UBC vs. Sumber Alfaria Trijaya | PT UBC vs. Mitra Pinasthika Mustika |
| Steel Pipe vs. Timah Persero Tbk | Steel Pipe vs. Semen Indonesia Persero | Steel Pipe vs. Mitra Pinasthika Mustika | Steel Pipe vs. Jakarta Int Hotels |
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 My Watchlist Analysis module to analyze my current watchlist and to refresh optimization strategy. Macroaxis watchlist is based on self-learning algorithm to remember stocks you like.
Other Complementary Tools
| Watchlist Optimization Optimize watchlists to build efficient portfolios or rebalance existing positions based on the mean-variance optimization algorithm | |
| Performance Analysis Check effects of mean-variance optimization against your current asset allocation | |
| Portfolio Optimization Compute new portfolio that will generate highest expected return given your specified tolerance for risk | |
| Piotroski F Score Get Piotroski F Score based on the binary analysis strategy of nine different fundamentals | |
| Sectors List of equity sectors categorizing publicly traded companies based on their primary business activities |