Correlation Between Indo Acidatama and Indorama Synthetics
Can any of the company-specific risk be diversified away by investing in both Indo Acidatama and Indorama Synthetics 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 Indorama Synthetics 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 Indorama Synthetics Tbk, you can compare the effects of market volatilities on Indo Acidatama and Indorama Synthetics 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 Indorama Synthetics. Check out your portfolio center. Please also check ongoing floating volatility patterns of Indo Acidatama and Indorama Synthetics.
Diversification Opportunities for Indo Acidatama and Indorama Synthetics
0.69 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Indo and Indorama is 0.69. Overlapping area represents the amount of risk that can be diversified away by holding Indo Acidatama Tbk and Indorama Synthetics Tbk in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Indorama Synthetics 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 Indorama Synthetics. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Indorama Synthetics Tbk has no effect on the direction of Indo Acidatama i.e., Indo Acidatama and Indorama Synthetics go up and down completely randomly.
Pair Corralation between Indo Acidatama and Indorama Synthetics
Assuming the 90 days trading horizon Indo Acidatama Tbk is expected to generate 0.58 times more return on investment than Indorama Synthetics. However, Indo Acidatama Tbk is 1.72 times less risky than Indorama Synthetics. It trades about -0.03 of its potential returns per unit of risk. Indorama Synthetics Tbk is currently generating about -0.28 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. Indorama Synthetics Tbk
Performance |
| Timeline |
| Indo Acidatama Tbk |
| Indorama Synthetics Tbk |
Indo Acidatama and Indorama Synthetics Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Indo Acidatama and Indorama Synthetics
The main advantage of trading using opposite Indo Acidatama and Indorama Synthetics positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Indo Acidatama position performs unexpectedly, Indorama Synthetics 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 Indorama Synthetics will offset losses from the drop in Indorama Synthetics' 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 |
| Indorama Synthetics vs. Indospring Tbk | Indorama Synthetics vs. Indomobil Sukses Internasional | Indorama Synthetics vs. Sumi Indo Kabel | Indorama Synthetics vs. Goodyear Indonesia Tbk |
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 Sync Your Broker module to sync your existing holdings, watchlists, positions or portfolios from thousands of online brokerage services, banks, investment account aggregators and robo-advisors..
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