Correlation Between Indo Acidatama and Buana Listya
Can any of the company-specific risk be diversified away by investing in both Indo Acidatama and Buana Listya 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 Buana Listya 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 Buana Listya Tama, you can compare the effects of market volatilities on Indo Acidatama and Buana Listya 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 Buana Listya. Check out your portfolio center. Please also check ongoing floating volatility patterns of Indo Acidatama and Buana Listya.
Diversification Opportunities for Indo Acidatama and Buana Listya
0.42 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Indo and Buana is 0.42. Overlapping area represents the amount of risk that can be diversified away by holding Indo Acidatama Tbk and Buana Listya Tama in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Buana Listya Tama 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 Buana Listya. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Buana Listya Tama has no effect on the direction of Indo Acidatama i.e., Indo Acidatama and Buana Listya go up and down completely randomly.
Pair Corralation between Indo Acidatama and Buana Listya
If you would invest 12,400 in Buana Listya Tama on November 3, 2024 and sell it today you would earn a total of 1,800 from holding Buana Listya Tama or generate 14.52% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Indo Acidatama Tbk vs. Buana Listya Tama
Performance |
| Timeline |
| Indo Acidatama Tbk |
| Buana Listya Tama |
Indo Acidatama and Buana Listya Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Indo Acidatama and Buana Listya
The main advantage of trading using opposite Indo Acidatama and Buana Listya positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Indo Acidatama position performs unexpectedly, Buana Listya 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 Buana Listya will offset losses from the drop in Buana Listya's long position.| Indo Acidatama vs. Asiaplast Industries Tbk | Indo Acidatama vs. Alumindo Light Metal | Indo Acidatama vs. Berlina Tbk | Indo Acidatama vs. Anugerah Kagum Karya |
| Buana Listya vs. Sentra Food Indonesia | Buana Listya vs. Capital Financial Indonesia | Buana Listya vs. Global Mediacom Tbk | Buana Listya vs. Dyandra Media International |
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 Portfolio Optimization module to compute new portfolio that will generate highest expected return given your specified tolerance for risk.
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