Correlation Between Tunas Baru and Tempo Scan
Can any of the company-specific risk be diversified away by investing in both Tunas Baru and Tempo Scan 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 Tunas Baru and Tempo Scan into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Tunas Baru Lampung and Tempo Scan Pacific, you can compare the effects of market volatilities on Tunas Baru and Tempo Scan 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 Tunas Baru with a short position of Tempo Scan. Check out your portfolio center. Please also check ongoing floating volatility patterns of Tunas Baru and Tempo Scan.
Diversification Opportunities for Tunas Baru and Tempo Scan
0.22 | Correlation Coefficient |
Modest diversification
The 3 months correlation between Tunas and Tempo is 0.22. Overlapping area represents the amount of risk that can be diversified away by holding Tunas Baru Lampung and Tempo Scan Pacific in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Tempo Scan Pacific and Tunas Baru 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 Tunas Baru Lampung are associated (or correlated) with Tempo Scan. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Tempo Scan Pacific has no effect on the direction of Tunas Baru i.e., Tunas Baru and Tempo Scan go up and down completely randomly.
Pair Corralation between Tunas Baru and Tempo Scan
Assuming the 90 days trading horizon Tunas Baru Lampung is expected to generate 0.67 times more return on investment than Tempo Scan. However, Tunas Baru Lampung is 1.5 times less risky than Tempo Scan. It trades about 0.07 of its potential returns per unit of risk. Tempo Scan Pacific is currently generating about 0.02 per unit of risk. If you would invest 60,800 in Tunas Baru Lampung on September 2, 2024 and sell it today you would earn a total of 2,700 from holding Tunas Baru Lampung or generate 4.44% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Tunas Baru Lampung vs. Tempo Scan Pacific
Performance |
| Timeline |
| Tunas Baru Lampung |
| Tempo Scan Pacific |
Tunas Baru and Tempo Scan Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Tunas Baru and Tempo Scan
The main advantage of trading using opposite Tunas Baru and Tempo Scan positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Tunas Baru position performs unexpectedly, Tempo Scan 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 Tempo Scan will offset losses from the drop in Tempo Scan's long position.| Tunas Baru vs. Bank BRISyariah Tbk | Tunas Baru vs. Mitra Pinasthika Mustika | Tunas Baru vs. Jakarta Int Hotels | Tunas Baru vs. Indosterling Technomedia Tbk |
| Tempo Scan vs. Total Bangun Persada | Tempo Scan vs. Tunas Baru Lampung | Tempo Scan vs. Solusi Bangun Indonesia | Tempo Scan vs. Ramayana Lestari Sentosa |
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 Bond Analysis module to evaluate and analyze corporate bonds as a potential investment for your portfolios..
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