Correlation Between Salim Ivomas and Austindo Nusantara
Can any of the company-specific risk be diversified away by investing in both Salim Ivomas and Austindo Nusantara 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 Salim Ivomas and Austindo Nusantara into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Salim Ivomas Pratama and Austindo Nusantara Jaya, you can compare the effects of market volatilities on Salim Ivomas and Austindo Nusantara 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 Salim Ivomas with a short position of Austindo Nusantara. Check out your portfolio center. Please also check ongoing floating volatility patterns of Salim Ivomas and Austindo Nusantara.
Diversification Opportunities for Salim Ivomas and Austindo Nusantara
0.78 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Salim and Austindo is 0.78. Overlapping area represents the amount of risk that can be diversified away by holding Salim Ivomas Pratama and Austindo Nusantara Jaya in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Austindo Nusantara Jaya and Salim Ivomas 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 Salim Ivomas Pratama are associated (or correlated) with Austindo Nusantara. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Austindo Nusantara Jaya has no effect on the direction of Salim Ivomas i.e., Salim Ivomas and Austindo Nusantara go up and down completely randomly.
Pair Corralation between Salim Ivomas and Austindo Nusantara
Assuming the 90 days trading horizon Salim Ivomas Pratama is expected to under-perform the Austindo Nusantara. But the stock apears to be less risky and, when comparing its historical volatility, Salim Ivomas Pratama is 1.08 times less risky than Austindo Nusantara. The stock trades about -0.24 of its potential returns per unit of risk. The Austindo Nusantara Jaya is currently generating about 0.03 of returns per unit of risk over similar time horizon. If you would invest 73,000 in Austindo Nusantara Jaya on August 28, 2024 and sell it today you would earn a total of 500.00 from holding Austindo Nusantara Jaya or generate 0.68% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Salim Ivomas Pratama vs. Austindo Nusantara Jaya
Performance |
| Timeline |
| Salim Ivomas Pratama |
| Austindo Nusantara Jaya |
Salim Ivomas and Austindo Nusantara Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Salim Ivomas and Austindo Nusantara
The main advantage of trading using opposite Salim Ivomas and Austindo Nusantara positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Salim Ivomas position performs unexpectedly, Austindo Nusantara 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 Austindo Nusantara will offset losses from the drop in Austindo Nusantara's long position.The idea behind Salim Ivomas Pratama and Austindo Nusantara Jaya pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.| Austindo Nusantara vs. Dharma Satya Nusantara | Austindo Nusantara vs. Provident Agro Tbk | Austindo Nusantara vs. Salim Ivomas Pratama | Austindo Nusantara vs. Jaya Agra Wattie |
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 Stock Screener module to find equities using a custom stock filter or screen asymmetry in trading patterns, price, volume, or investment outlook..
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