Correlation Between Pelangi Indah and Acset Indonusa
Can any of the company-specific risk be diversified away by investing in both Pelangi Indah and Acset Indonusa 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 Pelangi Indah and Acset Indonusa into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Pelangi Indah Canindo and Acset Indonusa Tbk, you can compare the effects of market volatilities on Pelangi Indah and Acset Indonusa 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 Pelangi Indah with a short position of Acset Indonusa. Check out your portfolio center. Please also check ongoing floating volatility patterns of Pelangi Indah and Acset Indonusa.
Diversification Opportunities for Pelangi Indah and Acset Indonusa
-0.61 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Pelangi and Acset is -0.61. Overlapping area represents the amount of risk that can be diversified away by holding Pelangi Indah Canindo and Acset Indonusa Tbk in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Acset Indonusa Tbk and Pelangi Indah 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 Pelangi Indah Canindo are associated (or correlated) with Acset Indonusa. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Acset Indonusa Tbk has no effect on the direction of Pelangi Indah i.e., Pelangi Indah and Acset Indonusa go up and down completely randomly.
Pair Corralation between Pelangi Indah and Acset Indonusa
Assuming the 90 days trading horizon Pelangi Indah Canindo is expected to under-perform the Acset Indonusa. In addition to that, Pelangi Indah is 3.13 times more volatile than Acset Indonusa Tbk. It trades about -0.31 of its total potential returns per unit of risk. Acset Indonusa Tbk is currently generating about -0.15 per unit of volatility. If you would invest 10,900 in Acset Indonusa Tbk on August 28, 2024 and sell it today you would lose (600.00) from holding Acset Indonusa Tbk or give up 5.5% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Pelangi Indah Canindo vs. Acset Indonusa Tbk
Performance |
| Timeline |
| Pelangi Indah Canindo |
| Acset Indonusa Tbk |
Pelangi Indah and Acset Indonusa Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Pelangi Indah and Acset Indonusa
The main advantage of trading using opposite Pelangi Indah and Acset Indonusa positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Pelangi Indah position performs unexpectedly, Acset Indonusa 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 Acset Indonusa will offset losses from the drop in Acset Indonusa's long position.| Pelangi Indah vs. Kedaung Indah Can | Pelangi Indah vs. Langgeng Makmur Industri | Pelangi Indah vs. Kabelindo Murni Tbk | Pelangi Indah vs. Mustika Ratu 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 Portfolio Rebalancing module to analyze risk-adjusted returns against different time horizons to find asset-allocation targets.
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