Correlation Between Triputra Agro and Aman Agrindo
Can any of the company-specific risk be diversified away by investing in both Triputra Agro and Aman Agrindo 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 Triputra Agro and Aman Agrindo into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Triputra Agro Persada and Aman Agrindo, you can compare the effects of market volatilities on Triputra Agro and Aman Agrindo 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 Triputra Agro with a short position of Aman Agrindo. Check out your portfolio center. Please also check ongoing floating volatility patterns of Triputra Agro and Aman Agrindo.
Diversification Opportunities for Triputra Agro and Aman Agrindo
-0.75 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Triputra and Aman is -0.75. Overlapping area represents the amount of risk that can be diversified away by holding Triputra Agro Persada and Aman Agrindo in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Aman Agrindo and Triputra Agro 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 Triputra Agro Persada are associated (or correlated) with Aman Agrindo. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Aman Agrindo has no effect on the direction of Triputra Agro i.e., Triputra Agro and Aman Agrindo go up and down completely randomly.
Pair Corralation between Triputra Agro and Aman Agrindo
Assuming the 90 days trading horizon Triputra Agro Persada is expected to generate 0.5 times more return on investment than Aman Agrindo. However, Triputra Agro Persada is 1.99 times less risky than Aman Agrindo. It trades about 0.16 of its potential returns per unit of risk. Aman Agrindo is currently generating about -0.09 per unit of risk. If you would invest 52,027 in Triputra Agro Persada on August 30, 2024 and sell it today you would earn a total of 24,973 from holding Triputra Agro Persada or generate 48.0% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Triputra Agro Persada vs. Aman Agrindo
Performance |
| Timeline |
| Triputra Agro Persada |
| Aman Agrindo |
Triputra Agro and Aman Agrindo Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Triputra Agro and Aman Agrindo
The main advantage of trading using opposite Triputra Agro and Aman Agrindo positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Triputra Agro position performs unexpectedly, Aman Agrindo 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 Aman Agrindo will offset losses from the drop in Aman Agrindo's long position.| Triputra Agro vs. Dharma Satya Nusantara | Triputra Agro vs. Saratoga Investama Sedaya | Triputra Agro vs. Surya Esa Perkasa | Triputra Agro vs. Elang Mahkota Teknologi |
| Aman Agrindo vs. Putra Rajawali Kencana | Aman Agrindo vs. Sinergi Inti Plastindo | Aman Agrindo vs. Karya Bersama Anugerah | Aman Agrindo vs. Jasnita Telekomindo 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 Pair Correlation module to compare performance and examine fundamental relationship between any two equity instruments.
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