Correlation Between ATT and PT Semen
Can any of the company-specific risk be diversified away by investing in both ATT and PT Semen 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 ATT and PT Semen into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between ATT Inc and PT Semen Indonesia, you can compare the effects of market volatilities on ATT and PT Semen 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 ATT with a short position of PT Semen. Check out your portfolio center. Please also check ongoing floating volatility patterns of ATT and PT Semen.
Diversification Opportunities for ATT and PT Semen
Excellent diversification
The 3 months correlation between ATT and PSGTF is -0.62. Overlapping area represents the amount of risk that can be diversified away by holding ATT Inc and PT Semen Indonesia in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on PT Semen Indonesia and ATT 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 ATT Inc are associated (or correlated) with PT Semen. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of PT Semen Indonesia has no effect on the direction of ATT i.e., ATT and PT Semen go up and down completely randomly.
Pair Corralation between ATT and PT Semen
Taking into account the 90-day investment horizon ATT Inc is expected to generate 0.54 times more return on investment than PT Semen. However, ATT Inc is 1.87 times less risky than PT Semen. It trades about 0.14 of its potential returns per unit of risk. PT Semen Indonesia is currently generating about -0.09 per unit of risk. If you would invest 1,564 in ATT Inc on September 14, 2024 and sell it today you would earn a total of 786.50 from holding ATT Inc or generate 50.29% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 89.56% |
| Values | Daily Returns |
ATT Inc vs. PT Semen Indonesia
Performance |
| Timeline |
| ATT Inc |
| PT Semen Indonesia |
ATT and PT Semen Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with ATT and PT Semen
The main advantage of trading using opposite ATT and PT Semen positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if ATT position performs unexpectedly, PT Semen 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 PT Semen will offset losses from the drop in PT Semen's long position.The idea behind ATT Inc and PT Semen Indonesia pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.| PT Semen vs. Microbot Medical | PT Semen vs. Sonida Senior Living | PT Semen vs. NETGEAR | PT Semen vs. Anterix |
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 Commodity Directory module to find actively traded commodities issued by global exchanges.
Other Complementary Tools
| Performance Analysis Check effects of mean-variance optimization against your current asset allocation | |
| Companies Directory Evaluate performance of over 100,000 Stocks, Funds, and ETFs against different fundamentals | |
| Odds Of Bankruptcy Get analysis of equity chance of financial distress in the next 2 years | |
| Share Portfolio Track or share privately all of your investments from the convenience of any device | |
| Transaction History View history of all your transactions and understand their impact on performance |