Correlation Between Perusahaan Perkebunan and Indocement Tunggal
Can any of the company-specific risk be diversified away by investing in both Perusahaan Perkebunan and Indocement Tunggal 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 Perusahaan Perkebunan and Indocement Tunggal into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Perusahaan Perkebunan London and Indocement Tunggal Prakarsa, you can compare the effects of market volatilities on Perusahaan Perkebunan and Indocement Tunggal 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 Perusahaan Perkebunan with a short position of Indocement Tunggal. Check out your portfolio center. Please also check ongoing floating volatility patterns of Perusahaan Perkebunan and Indocement Tunggal.
Diversification Opportunities for Perusahaan Perkebunan and Indocement Tunggal
0.52 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Perusahaan and Indocement is 0.52. Overlapping area represents the amount of risk that can be diversified away by holding Perusahaan Perkebunan London and Indocement Tunggal Prakarsa in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Indocement Tunggal and Perusahaan Perkebunan 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 Perusahaan Perkebunan London are associated (or correlated) with Indocement Tunggal. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Indocement Tunggal has no effect on the direction of Perusahaan Perkebunan i.e., Perusahaan Perkebunan and Indocement Tunggal go up and down completely randomly.
Pair Corralation between Perusahaan Perkebunan and Indocement Tunggal
Assuming the 90 days trading horizon Perusahaan Perkebunan London is expected to generate 1.1 times more return on investment than Indocement Tunggal. However, Perusahaan Perkebunan is 1.1 times more volatile than Indocement Tunggal Prakarsa. It trades about 0.06 of its potential returns per unit of risk. Indocement Tunggal Prakarsa is currently generating about -0.07 per unit of risk. If you would invest 85,345 in Perusahaan Perkebunan London on September 2, 2024 and sell it today you would earn a total of 24,155 from holding Perusahaan Perkebunan London or generate 28.3% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Perusahaan Perkebunan London vs. Indocement Tunggal Prakarsa
Performance |
| Timeline |
| Perusahaan Perkebunan |
| Indocement Tunggal |
Perusahaan Perkebunan and Indocement Tunggal Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Perusahaan Perkebunan and Indocement Tunggal
The main advantage of trading using opposite Perusahaan Perkebunan and Indocement Tunggal positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Perusahaan Perkebunan position performs unexpectedly, Indocement Tunggal 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 Indocement Tunggal will offset losses from the drop in Indocement Tunggal's long position.| Perusahaan Perkebunan vs. Bank BRISyariah Tbk | Perusahaan Perkebunan vs. Mitra Pinasthika Mustika | Perusahaan Perkebunan vs. Jakarta Int Hotels | Perusahaan Perkebunan vs. Indosterling Technomedia Tbk |
| Indocement Tunggal vs. Perusahaan Gas Negara | Indocement Tunggal vs. Telkom Indonesia Tbk | Indocement Tunggal vs. Mitra Pinasthika Mustika | Indocement Tunggal 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 Odds Of Bankruptcy module to get analysis of equity chance of financial distress in the next 2 years.
Other Complementary Tools
| Portfolio Analyzer Portfolio analysis module that provides access to portfolio diagnostics and optimization engine | |
| Equity Search Search for actively traded equities including funds and ETFs from over 30 global markets | |
| Economic Indicators Top statistical indicators that provide insights into how an economy is performing | |
| Investing Opportunities Build portfolios using our predefined set of ideas and optimize them against your investing preferences | |
| Transaction History View history of all your transactions and understand their impact on performance |