Correlation Between Indo Acidatama and Smartfren Telecom
Can any of the company-specific risk be diversified away by investing in both Indo Acidatama and Smartfren Telecom 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 Smartfren Telecom 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 Smartfren Telecom Tbk, you can compare the effects of market volatilities on Indo Acidatama and Smartfren Telecom 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 Smartfren Telecom. Check out your portfolio center. Please also check ongoing floating volatility patterns of Indo Acidatama and Smartfren Telecom.
Diversification Opportunities for Indo Acidatama and Smartfren Telecom
0.64 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Indo and Smartfren is 0.64. Overlapping area represents the amount of risk that can be diversified away by holding Indo Acidatama Tbk and Smartfren Telecom Tbk in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Smartfren Telecom Tbk 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 Smartfren Telecom. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Smartfren Telecom Tbk has no effect on the direction of Indo Acidatama i.e., Indo Acidatama and Smartfren Telecom go up and down completely randomly.
Pair Corralation between Indo Acidatama and Smartfren Telecom
Assuming the 90 days trading horizon Indo Acidatama Tbk is expected to generate 0.42 times more return on investment than Smartfren Telecom. However, Indo Acidatama Tbk is 2.35 times less risky than Smartfren Telecom. It trades about -0.03 of its potential returns per unit of risk. Smartfren Telecom Tbk is currently generating about -0.05 per unit of risk. If you would invest 5,100 in Indo Acidatama Tbk on August 30, 2024 and sell it today you would lose (100.00) from holding Indo Acidatama Tbk or give up 1.96% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Indo Acidatama Tbk vs. Smartfren Telecom Tbk
Performance |
| Timeline |
| Indo Acidatama Tbk |
| Smartfren Telecom Tbk |
Indo Acidatama and Smartfren Telecom Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Indo Acidatama and Smartfren Telecom
The main advantage of trading using opposite Indo Acidatama and Smartfren Telecom positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Indo Acidatama position performs unexpectedly, Smartfren Telecom 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 Smartfren Telecom will offset losses from the drop in Smartfren Telecom's long position.| Indo Acidatama vs. PT Sreeya Sewu | Indo Acidatama vs. Trias Sentosa Tbk | Indo Acidatama vs. Slj Global Tbk | Indo Acidatama vs. Suparma Tbk |
| Smartfren Telecom vs. Bank Artos Indonesia | Smartfren Telecom vs. PT Bukalapak | Smartfren Telecom vs. Sumber Alfaria Trijaya | Smartfren Telecom vs. Merdeka Copper Gold |
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 ETF Categories module to list of ETF categories grouped based on various criteria, such as the investment strategy or type of investments.
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