Correlation Between Nanotech Indonesia and Siloam International
Can any of the company-specific risk be diversified away by investing in both Nanotech Indonesia and Siloam International 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 Nanotech Indonesia and Siloam International into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Nanotech Indonesia Global and Siloam International Hospitals, you can compare the effects of market volatilities on Nanotech Indonesia and Siloam International 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 Nanotech Indonesia with a short position of Siloam International. Check out your portfolio center. Please also check ongoing floating volatility patterns of Nanotech Indonesia and Siloam International.
Diversification Opportunities for Nanotech Indonesia and Siloam International
0.17 | Correlation Coefficient |
Average diversification
The 3 months correlation between Nanotech and Siloam is 0.17. Overlapping area represents the amount of risk that can be diversified away by holding Nanotech Indonesia Global and Siloam International Hospitals in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Siloam International and Nanotech Indonesia 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 Nanotech Indonesia Global are associated (or correlated) with Siloam International. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Siloam International has no effect on the direction of Nanotech Indonesia i.e., Nanotech Indonesia and Siloam International go up and down completely randomly.
Pair Corralation between Nanotech Indonesia and Siloam International
Assuming the 90 days trading horizon Nanotech Indonesia is expected to generate 6.02 times less return on investment than Siloam International. In addition to that, Nanotech Indonesia is 1.19 times more volatile than Siloam International Hospitals. It trades about 0.01 of its total potential returns per unit of risk. Siloam International Hospitals is currently generating about 0.08 per unit of volatility. If you would invest 124,125 in Siloam International Hospitals on September 3, 2024 and sell it today you would earn a total of 179,875 from holding Siloam International Hospitals or generate 144.91% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Nanotech Indonesia Global vs. Siloam International Hospitals
Performance |
| Timeline |
| Nanotech Indonesia Global |
| Siloam International |
Nanotech Indonesia and Siloam International Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Nanotech Indonesia and Siloam International
The main advantage of trading using opposite Nanotech Indonesia and Siloam International positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Nanotech Indonesia position performs unexpectedly, Siloam International 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 Siloam International will offset losses from the drop in Siloam International's long position.| Nanotech Indonesia vs. Dayamitra Telekomunikasi PT | Nanotech Indonesia vs. Wir Asia Tbk | Nanotech Indonesia vs. Mitra Pinasthika Mustika | Nanotech Indonesia vs. Jakarta Int Hotels |
| Siloam International vs. Surya Citra Media | Siloam International vs. Sawit Sumbermas Sarana | Siloam International vs. Mitra Pinasthika Mustika | Siloam International 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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