Correlation Between Link Net and Indoritel Makmur
Can any of the company-specific risk be diversified away by investing in both Link Net and Indoritel Makmur 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 Link Net and Indoritel Makmur into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Link Net Tbk and Indoritel Makmur Internasional, you can compare the effects of market volatilities on Link Net and Indoritel Makmur 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 Link Net with a short position of Indoritel Makmur. Check out your portfolio center. Please also check ongoing floating volatility patterns of Link Net and Indoritel Makmur.
Diversification Opportunities for Link Net and Indoritel Makmur
0.52 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Link and Indoritel is 0.52. Overlapping area represents the amount of risk that can be diversified away by holding Link Net Tbk and Indoritel Makmur Internasional in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Indoritel Makmur Int and Link Net 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 Link Net Tbk are associated (or correlated) with Indoritel Makmur. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Indoritel Makmur Int has no effect on the direction of Link Net i.e., Link Net and Indoritel Makmur go up and down completely randomly.
Pair Corralation between Link Net and Indoritel Makmur
Assuming the 90 days trading horizon Link Net Tbk is expected to generate 3.81 times more return on investment than Indoritel Makmur. However, Link Net is 3.81 times more volatile than Indoritel Makmur Internasional. It trades about 0.13 of its potential returns per unit of risk. Indoritel Makmur Internasional is currently generating about 0.02 per unit of risk. If you would invest 120,000 in Link Net Tbk on September 12, 2024 and sell it today you would earn a total of 9,000 from holding Link Net Tbk or generate 7.5% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Link Net Tbk vs. Indoritel Makmur Internasional
Performance |
| Timeline |
| Link Net Tbk |
| Indoritel Makmur Int |
Link Net and Indoritel Makmur Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Link Net and Indoritel Makmur
The main advantage of trading using opposite Link Net and Indoritel Makmur positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Link Net position performs unexpectedly, Indoritel Makmur 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 Indoritel Makmur will offset losses from the drop in Indoritel Makmur's long position.| Link Net vs. Mnc Land Tbk | Link Net vs. MNC Vision Networks | Link Net vs. MD Pictures Tbk | Link Net vs. Medikaloka Hermina PT |
| Indoritel Makmur vs. Mnc Land Tbk | Indoritel Makmur vs. MNC Vision Networks | Indoritel Makmur vs. MD Pictures Tbk | Indoritel Makmur vs. Link Net 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 Global Correlations module to find global opportunities by holding instruments from different markets.
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