Correlation Between PT Techno9 and Itama Ranoraya
Can any of the company-specific risk be diversified away by investing in both PT Techno9 and Itama Ranoraya 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 PT Techno9 and Itama Ranoraya into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between PT Techno9 Indonesia and Itama Ranoraya, you can compare the effects of market volatilities on PT Techno9 and Itama Ranoraya 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 PT Techno9 with a short position of Itama Ranoraya. Check out your portfolio center. Please also check ongoing floating volatility patterns of PT Techno9 and Itama Ranoraya.
Diversification Opportunities for PT Techno9 and Itama Ranoraya
-0.88 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between NINE and Itama is -0.88. Overlapping area represents the amount of risk that can be diversified away by holding PT Techno9 Indonesia and Itama Ranoraya in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Itama Ranoraya and PT Techno9 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 PT Techno9 Indonesia are associated (or correlated) with Itama Ranoraya. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Itama Ranoraya has no effect on the direction of PT Techno9 i.e., PT Techno9 and Itama Ranoraya go up and down completely randomly.
Pair Corralation between PT Techno9 and Itama Ranoraya
Assuming the 90 days trading horizon PT Techno9 Indonesia is expected to generate 4.56 times more return on investment than Itama Ranoraya. However, PT Techno9 is 4.56 times more volatile than Itama Ranoraya. It trades about 1.32 of its potential returns per unit of risk. Itama Ranoraya is currently generating about -0.48 per unit of risk. If you would invest 1,100 in PT Techno9 Indonesia on August 30, 2024 and sell it today you would earn a total of 2,800 from holding PT Techno9 Indonesia or generate 254.55% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
PT Techno9 Indonesia vs. Itama Ranoraya
Performance |
| Timeline |
| PT Techno9 Indonesia |
| Itama Ranoraya |
PT Techno9 and Itama Ranoraya Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with PT Techno9 and Itama Ranoraya
The main advantage of trading using opposite PT Techno9 and Itama Ranoraya positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if PT Techno9 position performs unexpectedly, Itama Ranoraya 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 Itama Ranoraya will offset losses from the drop in Itama Ranoraya's long position.| PT Techno9 vs. Indointernet Tbk PT | PT Techno9 vs. Multipolar Technology Tbk | PT Techno9 vs. Indosterling Technomedia Tbk | PT Techno9 vs. PT Data Sinergitama |
| Itama Ranoraya vs. Kimia Farma Persero | Itama Ranoraya vs. Indofarma Tbk | Itama Ranoraya vs. Bank BRISyariah Tbk | Itama Ranoraya vs. Bank Rakyat Indonesia |
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 Transaction History module to view history of all your transactions and understand their impact on performance.
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