Correlation Between Perusahaan Gas and Indo Tambangraya
Can any of the company-specific risk be diversified away by investing in both Perusahaan Gas and Indo Tambangraya 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 Perusahaan Gas and Indo Tambangraya into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Perusahaan Gas Negara and Indo Tambangraya Megah, you can compare the effects of market volatilities on Perusahaan Gas and Indo Tambangraya 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 Perusahaan Gas with a short position of Indo Tambangraya. Check out your portfolio center. Please also check ongoing floating volatility patterns of Perusahaan Gas and Indo Tambangraya.
Diversification Opportunities for Perusahaan Gas and Indo Tambangraya
-0.38 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Perusahaan and Indo is -0.38. Overlapping area represents the amount of risk that can be diversified away by holding Perusahaan Gas Negara and Indo Tambangraya Megah in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Indo Tambangraya Megah and Perusahaan Gas 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 Perusahaan Gas Negara are associated (or correlated) with Indo Tambangraya. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Indo Tambangraya Megah has no effect on the direction of Perusahaan Gas i.e., Perusahaan Gas and Indo Tambangraya go up and down completely randomly.
Pair Corralation between Perusahaan Gas and Indo Tambangraya
Assuming the 90 days trading horizon Perusahaan Gas Negara is expected to under-perform the Indo Tambangraya. In addition to that, Perusahaan Gas is 1.25 times more volatile than Indo Tambangraya Megah. It trades about 0.0 of its total potential returns per unit of risk. Indo Tambangraya Megah is currently generating about 0.31 per unit of volatility. If you would invest 2,552,500 in Indo Tambangraya Megah on August 26, 2024 and sell it today you would earn a total of 242,500 from holding Indo Tambangraya Megah or generate 9.5% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Perusahaan Gas Negara vs. Indo Tambangraya Megah
Performance |
| Timeline |
| Perusahaan Gas Negara |
| Indo Tambangraya Megah |
Perusahaan Gas and Indo Tambangraya Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Perusahaan Gas and Indo Tambangraya
The main advantage of trading using opposite Perusahaan Gas and Indo Tambangraya positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Perusahaan Gas position performs unexpectedly, Indo Tambangraya 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 Indo Tambangraya will offset losses from the drop in Indo Tambangraya's long position.| Perusahaan Gas vs. Aneka Tambang Persero | Perusahaan Gas vs. Bukit Asam Tbk | Perusahaan Gas vs. Telkom Indonesia Tbk | Perusahaan Gas vs. Astra International Tbk |
| Indo Tambangraya vs. Bukit Asam Tbk | Indo Tambangraya vs. Adaro Energy Tbk | Indo Tambangraya vs. United Tractors Tbk | Indo Tambangraya vs. Vale Indonesia Tbk |
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 Idea Breakdown module to analyze constituents of all Macroaxis ideas. Macroaxis investment ideas are predefined, sector-focused investing themes.
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