Correlation Between Indo Acidatama and Menthobi Karyatama
Can any of the company-specific risk be diversified away by investing in both Indo Acidatama and Menthobi Karyatama 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 Menthobi Karyatama 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 Menthobi Karyatama Raya, you can compare the effects of market volatilities on Indo Acidatama and Menthobi Karyatama 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 Menthobi Karyatama. Check out your portfolio center. Please also check ongoing floating volatility patterns of Indo Acidatama and Menthobi Karyatama.
Diversification Opportunities for Indo Acidatama and Menthobi Karyatama
0.12 | Correlation Coefficient |
Average diversification
The 3 months correlation between Indo and Menthobi is 0.12. Overlapping area represents the amount of risk that can be diversified away by holding Indo Acidatama Tbk and Menthobi Karyatama Raya in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Menthobi Karyatama Raya 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 Menthobi Karyatama. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Menthobi Karyatama Raya has no effect on the direction of Indo Acidatama i.e., Indo Acidatama and Menthobi Karyatama go up and down completely randomly.
Pair Corralation between Indo Acidatama and Menthobi Karyatama
Assuming the 90 days trading horizon Indo Acidatama Tbk is expected to generate 1.09 times more return on investment than Menthobi Karyatama. However, Indo Acidatama is 1.09 times more volatile than Menthobi Karyatama Raya. It trades about 0.03 of its potential returns per unit of risk. Menthobi Karyatama Raya is currently generating about -0.03 per unit of risk. If you would invest 4,900 in Indo Acidatama Tbk on August 30, 2024 and sell it today you would earn a total of 200.00 from holding Indo Acidatama Tbk or generate 4.08% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Indo Acidatama Tbk vs. Menthobi Karyatama Raya
Performance |
| Timeline |
| Indo Acidatama Tbk |
| Menthobi Karyatama Raya |
Indo Acidatama and Menthobi Karyatama Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Indo Acidatama and Menthobi Karyatama
The main advantage of trading using opposite Indo Acidatama and Menthobi Karyatama positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Indo Acidatama position performs unexpectedly, Menthobi Karyatama 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 Menthobi Karyatama will offset losses from the drop in Menthobi Karyatama'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 |
| Menthobi Karyatama vs. Prima Alloy Steel | Menthobi Karyatama vs. PT Wahana Interfood | Menthobi Karyatama vs. Enseval Putra Megatrading | Menthobi Karyatama vs. Indo Acidatama 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 Options Analysis module to analyze and evaluate options and option chains as a potential hedge for your portfolios.
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