Correlation Between Emdeki Utama and Inocycle Technology
Can any of the company-specific risk be diversified away by investing in both Emdeki Utama and Inocycle Technology 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 Emdeki Utama and Inocycle Technology into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Emdeki Utama Tbk and Inocycle Technology Tbk, you can compare the effects of market volatilities on Emdeki Utama and Inocycle Technology 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 Emdeki Utama with a short position of Inocycle Technology. Check out your portfolio center. Please also check ongoing floating volatility patterns of Emdeki Utama and Inocycle Technology.
Diversification Opportunities for Emdeki Utama and Inocycle Technology
-0.59 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Emdeki and Inocycle is -0.59. Overlapping area represents the amount of risk that can be diversified away by holding Emdeki Utama Tbk and Inocycle Technology Tbk in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Inocycle Technology Tbk and Emdeki Utama 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 Emdeki Utama Tbk are associated (or correlated) with Inocycle Technology. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Inocycle Technology Tbk has no effect on the direction of Emdeki Utama i.e., Emdeki Utama and Inocycle Technology go up and down completely randomly.
Pair Corralation between Emdeki Utama and Inocycle Technology
Assuming the 90 days trading horizon Emdeki Utama is expected to generate 1.34 times less return on investment than Inocycle Technology. But when comparing it to its historical volatility, Emdeki Utama Tbk is 4.68 times less risky than Inocycle Technology. It trades about 0.02 of its potential returns per unit of risk. Inocycle Technology Tbk is currently generating about 0.01 of returns per unit of risk over similar time horizon. If you would invest 12,900 in Inocycle Technology Tbk on August 29, 2024 and sell it today you would lose (2,800) from holding Inocycle Technology Tbk or give up 21.71% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Emdeki Utama Tbk vs. Inocycle Technology Tbk
Performance |
| Timeline |
| Emdeki Utama Tbk |
| Inocycle Technology Tbk |
Emdeki Utama and Inocycle Technology Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Emdeki Utama and Inocycle Technology
The main advantage of trading using opposite Emdeki Utama and Inocycle Technology positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Emdeki Utama position performs unexpectedly, Inocycle Technology 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 Inocycle Technology will offset losses from the drop in Inocycle Technology's long position.| Emdeki Utama vs. Panca Budi Idaman | Emdeki Utama vs. Intanwijaya Internasional Tbk | Emdeki Utama vs. Hartadinata Abadi Tbk | Emdeki Utama vs. Unggul Indah Cahaya |
| Inocycle Technology vs. MNC Vision Networks | Inocycle Technology vs. Hartadinata Abadi Tbk | Inocycle Technology vs. Kencana Energi Lestari | Inocycle Technology vs. Bali Bintang Sejahtera |
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 Companies Directory module to evaluate performance of over 100,000 Stocks, Funds, and ETFs against different fundamentals.
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