Correlation Between Indo Acidatama and Alumindo Light
Can any of the company-specific risk be diversified away by investing in both Indo Acidatama and Alumindo Light 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 Indo Acidatama and Alumindo Light into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Indo Acidatama Tbk and Alumindo Light Metal, you can compare the effects of market volatilities on Indo Acidatama and Alumindo Light 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 Indo Acidatama with a short position of Alumindo Light. Check out your portfolio center. Please also check ongoing floating volatility patterns of Indo Acidatama and Alumindo Light.
Diversification Opportunities for Indo Acidatama and Alumindo Light
0.32 | Correlation Coefficient |
Weak diversification
The 3 months correlation between Indo and Alumindo is 0.32. Overlapping area represents the amount of risk that can be diversified away by holding Indo Acidatama Tbk and Alumindo Light Metal in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Alumindo Light Metal and Indo Acidatama 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 Indo Acidatama Tbk are associated (or correlated) with Alumindo Light. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Alumindo Light Metal has no effect on the direction of Indo Acidatama i.e., Indo Acidatama and Alumindo Light go up and down completely randomly.
Pair Corralation between Indo Acidatama and Alumindo Light
If you would invest 5,000 in Indo Acidatama Tbk on September 2, 2024 and sell it today you would earn a total of 0.00 from holding Indo Acidatama Tbk or generate 0.0% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 95.24% |
| Values | Daily Returns |
Indo Acidatama Tbk vs. Alumindo Light Metal
Performance |
| Timeline |
| Indo Acidatama Tbk |
| Alumindo Light Metal |
Indo Acidatama and Alumindo Light Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Indo Acidatama and Alumindo Light
The main advantage of trading using opposite Indo Acidatama and Alumindo Light positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Indo Acidatama position performs unexpectedly, Alumindo Light 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 Alumindo Light will offset losses from the drop in Alumindo Light's long position.| Indo Acidatama vs. Perusahaan Gas Negara | Indo Acidatama vs. Telkom Indonesia Tbk | Indo Acidatama vs. Mitra Pinasthika Mustika | Indo Acidatama vs. Jakarta Int Hotels |
| Alumindo Light vs. Perusahaan Gas Negara | Alumindo Light vs. Telkom Indonesia Tbk | Alumindo Light vs. Mitra Pinasthika Mustika | Alumindo Light vs. Jakarta Int Hotels |
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 Pair Correlation module to compare performance and examine fundamental relationship between any two equity instruments.
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