Correlation Between FLOW TRADERS and PT Indosat
Can any of the company-specific risk be diversified away by investing in both FLOW TRADERS and PT Indosat 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 FLOW TRADERS and PT Indosat into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between FLOW TRADERS LTD and PT Indosat Tbk, you can compare the effects of market volatilities on FLOW TRADERS and PT Indosat 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 FLOW TRADERS with a short position of PT Indosat. Check out your portfolio center. Please also check ongoing floating volatility patterns of FLOW TRADERS and PT Indosat.
Diversification Opportunities for FLOW TRADERS and PT Indosat
-0.72 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between FLOW and IDO1 is -0.72. Overlapping area represents the amount of risk that can be diversified away by holding FLOW TRADERS LTD and PT Indosat Tbk in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on PT Indosat Tbk and FLOW TRADERS 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 FLOW TRADERS LTD are associated (or correlated) with PT Indosat. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of PT Indosat Tbk has no effect on the direction of FLOW TRADERS i.e., FLOW TRADERS and PT Indosat go up and down completely randomly.
Pair Corralation between FLOW TRADERS and PT Indosat
Assuming the 90 days horizon FLOW TRADERS is expected to generate 1.03 times less return on investment than PT Indosat. But when comparing it to its historical volatility, FLOW TRADERS LTD is 3.0 times less risky than PT Indosat. It trades about 0.04 of its potential returns per unit of risk. PT Indosat Tbk is currently generating about 0.01 of returns per unit of risk over similar time horizon. If you would invest 14.00 in PT Indosat Tbk on September 3, 2024 and sell it today you would lose (2.00) from holding PT Indosat Tbk or give up 14.29% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
FLOW TRADERS LTD vs. PT Indosat Tbk
Performance |
| Timeline |
| FLOW TRADERS LTD |
| PT Indosat Tbk |
FLOW TRADERS and PT Indosat Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with FLOW TRADERS and PT Indosat
The main advantage of trading using opposite FLOW TRADERS and PT Indosat positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if FLOW TRADERS position performs unexpectedly, PT Indosat 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 PT Indosat will offset losses from the drop in PT Indosat's long position.| FLOW TRADERS vs. Morgan Stanley | FLOW TRADERS vs. The Goldman Sachs | FLOW TRADERS vs. The Goldman Sachs | FLOW TRADERS vs. Superior Plus Corp |
| PT Indosat vs. T Mobile | PT Indosat vs. China Mobile Limited | PT Indosat vs. ATT Inc | PT Indosat vs. Nippon Telegraph and |
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 Global Correlations module to find global opportunities by holding instruments from different markets.
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