Correlation Between PT Indocement and Summit Materials
Can any of the company-specific risk be diversified away by investing in both PT Indocement and Summit Materials 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 Indocement and Summit Materials into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between PT Indocement Tunggal and Summit Materials, you can compare the effects of market volatilities on PT Indocement and Summit Materials 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 Indocement with a short position of Summit Materials. Check out your portfolio center. Please also check ongoing floating volatility patterns of PT Indocement and Summit Materials.
Diversification Opportunities for PT Indocement and Summit Materials
0.59 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between PITPF and Summit is 0.59. Overlapping area represents the amount of risk that can be diversified away by holding PT Indocement Tunggal and Summit Materials in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Summit Materials and PT Indocement 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 Indocement Tunggal are associated (or correlated) with Summit Materials. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Summit Materials has no effect on the direction of PT Indocement i.e., PT Indocement and Summit Materials go up and down completely randomly.
Pair Corralation between PT Indocement and Summit Materials
If you would invest 3,864 in Summit Materials on August 29, 2024 and sell it today you would earn a total of 1,221 from holding Summit Materials or generate 31.6% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 0.8% |
| Values | Daily Returns |
PT Indocement Tunggal vs. Summit Materials
Performance |
| Timeline |
| PT Indocement Tunggal |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
| Summit Materials |
PT Indocement and Summit Materials Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with PT Indocement and Summit Materials
The main advantage of trading using opposite PT Indocement and Summit Materials positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if PT Indocement position performs unexpectedly, Summit Materials 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 Summit Materials will offset losses from the drop in Summit Materials' long position.| PT Indocement vs. Summit Materials | PT Indocement vs. Cementos Pacasmayo SAA | PT Indocement vs. James Hardie Industries | PT Indocement vs. United States Lime |
| Summit Materials vs. Holcim | Summit Materials vs. Lafargeholcim Ltd ADR | Summit Materials vs. The Monarch Cement |
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 ETF Categories module to list of ETF categories grouped based on various criteria, such as the investment strategy or type of investments.
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