Correlation Between Pelat Timah and Timah Persero
Can any of the company-specific risk be diversified away by investing in both Pelat Timah and Timah Persero 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 Pelat Timah and Timah Persero into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Pelat Timah Nusantara and Timah Persero Tbk, you can compare the effects of market volatilities on Pelat Timah and Timah Persero 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 Pelat Timah with a short position of Timah Persero. Check out your portfolio center. Please also check ongoing floating volatility patterns of Pelat Timah and Timah Persero.
Diversification Opportunities for Pelat Timah and Timah Persero
0.53 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Pelat and Timah is 0.53. Overlapping area represents the amount of risk that can be diversified away by holding Pelat Timah Nusantara and Timah Persero Tbk in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Timah Persero Tbk and Pelat Timah 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 Pelat Timah Nusantara are associated (or correlated) with Timah Persero. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Timah Persero Tbk has no effect on the direction of Pelat Timah i.e., Pelat Timah and Timah Persero go up and down completely randomly.
Pair Corralation between Pelat Timah and Timah Persero
Assuming the 90 days trading horizon Pelat Timah Nusantara is expected to generate 0.44 times more return on investment than Timah Persero. However, Pelat Timah Nusantara is 2.29 times less risky than Timah Persero. It trades about -0.16 of its potential returns per unit of risk. Timah Persero Tbk is currently generating about -0.23 per unit of risk. If you would invest 28,000 in Pelat Timah Nusantara on September 3, 2024 and sell it today you would lose (1,600) from holding Pelat Timah Nusantara or give up 5.71% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Pelat Timah Nusantara vs. Timah Persero Tbk
Performance |
| Timeline |
| Pelat Timah Nusantara |
| Timah Persero Tbk |
Pelat Timah and Timah Persero Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Pelat Timah and Timah Persero
The main advantage of trading using opposite Pelat Timah and Timah Persero positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Pelat Timah position performs unexpectedly, Timah Persero 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 Timah Persero will offset losses from the drop in Timah Persero's long position.| Pelat Timah vs. Timah Persero Tbk | Pelat Timah vs. Semen Indonesia Persero | Pelat Timah vs. Mitra Pinasthika Mustika | Pelat Timah vs. Jakarta Int Hotels |
| Timah Persero vs. Vale Indonesia Tbk | Timah Persero vs. Aneka Tambang Persero | Timah Persero vs. Bukit Asam Tbk | Timah Persero vs. Perusahaan Gas Negara |
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 Options Analysis module to analyze and evaluate options and option chains as a potential hedge for your portfolios.
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