Correlation Between Intermedia Capital and Alumindo Light
Can any of the company-specific risk be diversified away by investing in both Intermedia Capital and Alumindo Light 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 Intermedia Capital and Alumindo Light into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Intermedia Capital Tbk and Alumindo Light Metal, you can compare the effects of market volatilities on Intermedia Capital and Alumindo Light 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 Intermedia Capital with a short position of Alumindo Light. Check out your portfolio center. Please also check ongoing floating volatility patterns of Intermedia Capital and Alumindo Light.
Diversification Opportunities for Intermedia Capital and Alumindo Light
0.0 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Intermedia and Alumindo is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding Intermedia Capital Tbk and Alumindo Light Metal in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Alumindo Light Metal and Intermedia Capital 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 Intermedia Capital Tbk are associated (or correlated) with Alumindo Light. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Alumindo Light Metal has no effect on the direction of Intermedia Capital i.e., Intermedia Capital and Alumindo Light go up and down completely randomly.
Pair Corralation between Intermedia Capital and Alumindo Light
Assuming the 90 days trading horizon Intermedia Capital Tbk is expected to under-perform the Alumindo Light. But the stock apears to be less risky and, when comparing its historical volatility, Intermedia Capital Tbk is 1.26 times less risky than Alumindo Light. The stock trades about -0.16 of its potential returns per unit of risk. The Alumindo Light Metal is currently generating about -0.07 of returns per unit of risk over similar time horizon. If you would invest 20,600 in Alumindo Light Metal on September 1, 2024 and sell it today you would lose (13,200) from holding Alumindo Light Metal or give up 64.08% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Flat |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Intermedia Capital Tbk vs. Alumindo Light Metal
Performance |
| Timeline |
| Intermedia Capital Tbk |
| Alumindo Light Metal |
Intermedia Capital and Alumindo Light Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Intermedia Capital and Alumindo Light
The main advantage of trading using opposite Intermedia Capital and Alumindo Light positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Intermedia Capital position performs unexpectedly, Alumindo Light 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 Alumindo Light will offset losses from the drop in Alumindo Light's long position.| Intermedia Capital vs. Indosat Tbk | Intermedia Capital vs. XL Axiata Tbk | Intermedia Capital vs. Energi Mega Persada | Intermedia Capital vs. Bakrie Brothers Tbk |
| Alumindo Light vs. Perusahaan Gas Negara | Alumindo Light vs. Telkom Indonesia Tbk | Alumindo Light vs. Mitra Pinasthika Mustika | Alumindo Light 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 Portfolio Diagnostics module to use generated alerts and portfolio events aggregator to diagnose current holdings.
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