Correlation Between ATT and PT Indosat
Can any of the company-specific risk be diversified away by investing in both ATT and PT Indosat 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 ATT and PT Indosat into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between ATT Inc and PT Indosat Tbk, you can compare the effects of market volatilities on ATT and PT Indosat 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 ATT with a short position of PT Indosat. Check out your portfolio center. Please also check ongoing floating volatility patterns of ATT and PT Indosat.
Diversification Opportunities for ATT and PT Indosat
-0.65 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between ATT and IDO1 is -0.65. Overlapping area represents the amount of risk that can be diversified away by holding ATT Inc and PT Indosat Tbk in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on PT Indosat Tbk and ATT 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 ATT Inc are associated (or correlated) with PT Indosat. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of PT Indosat Tbk has no effect on the direction of ATT i.e., ATT and PT Indosat go up and down completely randomly.
Pair Corralation between ATT and PT Indosat
Assuming the 90 days trading horizon ATT is expected to generate 1.99 times less return on investment than PT Indosat. But when comparing it to its historical volatility, ATT Inc is 9.15 times less risky than PT Indosat. It trades about 0.27 of its potential returns per unit of risk. PT Indosat Tbk is currently generating about 0.06 of returns per unit of risk over similar time horizon. If you would invest 13.00 in PT Indosat Tbk on August 27, 2024 and sell it today you would earn a total of 0.00 from holding PT Indosat Tbk or generate 0.0% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
ATT Inc vs. PT Indosat Tbk
Performance |
| Timeline |
| ATT Inc |
| PT Indosat Tbk |
ATT and PT Indosat Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with ATT and PT Indosat
The main advantage of trading using opposite ATT and PT Indosat positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if ATT position performs unexpectedly, PT Indosat 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 PT Indosat will offset losses from the drop in PT Indosat's long position.| ATT vs. STRAYER EDUCATION | ATT vs. Cass Information Systems | ATT vs. DOCDATA | ATT vs. National Storage Affiliates |
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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