Correlation Between Link Net and Tower Bersama
Can any of the company-specific risk be diversified away by investing in both Link Net and Tower Bersama 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 Tower Bersama 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 Tower Bersama Infrastructure, you can compare the effects of market volatilities on Link Net and Tower Bersama 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 Tower Bersama. Check out your portfolio center. Please also check ongoing floating volatility patterns of Link Net and Tower Bersama.
Diversification Opportunities for Link Net and Tower Bersama
0.09 | Correlation Coefficient |
Significant diversification
The 3 months correlation between Link and Tower is 0.09. Overlapping area represents the amount of risk that can be diversified away by holding Link Net Tbk and Tower Bersama Infrastructure in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Tower Bersama Infras 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 Tower Bersama. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Tower Bersama Infras has no effect on the direction of Link Net i.e., Link Net and Tower Bersama go up and down completely randomly.
Pair Corralation between Link Net and Tower Bersama
Assuming the 90 days trading horizon Link Net Tbk is expected to generate 7.48 times more return on investment than Tower Bersama. However, Link Net is 7.48 times more volatile than Tower Bersama Infrastructure. It trades about 0.46 of its potential returns per unit of risk. Tower Bersama Infrastructure is currently generating about -0.06 per unit of risk. If you would invest 121,000 in Link Net Tbk on November 3, 2024 and sell it today you would earn a total of 129,000 from holding Link Net Tbk or generate 106.61% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Link Net Tbk vs. Tower Bersama Infrastructure
Performance |
| Timeline |
| Link Net Tbk |
| Tower Bersama Infras |
Link Net and Tower Bersama Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Link Net and Tower Bersama
The main advantage of trading using opposite Link Net and Tower Bersama positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Link Net position performs unexpectedly, Tower Bersama 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 Tower Bersama will offset losses from the drop in Tower Bersama's long position.| Link Net vs. Mitra Keluarga Karyasehat | Link Net vs. Surya Citra Media | Link Net vs. Matahari Department Store | Link Net vs. Puradelta Lestari PT |
| Tower Bersama vs. PT Sarana Menara | Tower Bersama vs. XL Axiata Tbk | Tower Bersama vs. Merdeka Copper Gold | Tower Bersama vs. Surya Citra Media |
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 Bollinger Bands module to use Bollinger Bands indicator to analyze target price for a given investing horizon.
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