Correlation Between PT Solusi and Ichor Coal
Can any of the company-specific risk be diversified away by investing in both PT Solusi and Ichor Coal 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 Solusi and Ichor Coal into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between PT Solusi Bangun and Ichor Coal NV, you can compare the effects of market volatilities on PT Solusi and Ichor Coal 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 Solusi with a short position of Ichor Coal. Check out your portfolio center. Please also check ongoing floating volatility patterns of PT Solusi and Ichor Coal.
Diversification Opportunities for PT Solusi and Ichor Coal
-0.35 | Correlation Coefficient |
Very good diversification
The 3 months correlation between RU6 and Ichor is -0.35. Overlapping area represents the amount of risk that can be diversified away by holding PT Solusi Bangun and Ichor Coal NV in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Ichor Coal NV and PT Solusi 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 Solusi Bangun are associated (or correlated) with Ichor Coal. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Ichor Coal NV has no effect on the direction of PT Solusi i.e., PT Solusi and Ichor Coal go up and down completely randomly.
Pair Corralation between PT Solusi and Ichor Coal
Assuming the 90 days horizon PT Solusi Bangun is expected to generate 8.6 times more return on investment than Ichor Coal. However, PT Solusi is 8.6 times more volatile than Ichor Coal NV. It trades about 0.06 of its potential returns per unit of risk. Ichor Coal NV is currently generating about -0.16 per unit of risk. If you would invest 7.35 in PT Solusi Bangun on September 3, 2024 and sell it today you would lose (3.90) from holding PT Solusi Bangun or give up 53.06% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 98.8% |
| Values | Daily Returns |
PT Solusi Bangun vs. Ichor Coal NV
Performance |
| Timeline |
| PT Solusi Bangun |
| Ichor Coal NV |
PT Solusi and Ichor Coal Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with PT Solusi and Ichor Coal
The main advantage of trading using opposite PT Solusi and Ichor Coal positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if PT Solusi position performs unexpectedly, Ichor Coal 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 Ichor Coal will offset losses from the drop in Ichor Coal's long position.| PT Solusi vs. LION ONE METALS | PT Solusi vs. Tencent Music Entertainment | PT Solusi vs. ADRIATIC METALS LS 013355 | PT Solusi vs. GREENX METALS LTD |
| Ichor Coal vs. INTER CARS SA | Ichor Coal vs. CarsalesCom | Ichor Coal vs. MagnaChip Semiconductor Corp | Ichor Coal vs. AECOM TECHNOLOGY |
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 Optimizer module to use advanced portfolio builder with pre-computed micro ideas to build optimal portfolio .
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