Correlation Between Transcoal Pacific and PT Trimuda
Can any of the company-specific risk be diversified away by investing in both Transcoal Pacific and PT Trimuda 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 Transcoal Pacific and PT Trimuda into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Transcoal Pacific Tbk and PT Trimuda Nuansa, you can compare the effects of market volatilities on Transcoal Pacific and PT Trimuda 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 Transcoal Pacific with a short position of PT Trimuda. Check out your portfolio center. Please also check ongoing floating volatility patterns of Transcoal Pacific and PT Trimuda.
Diversification Opportunities for Transcoal Pacific and PT Trimuda
0.12 | Correlation Coefficient |
Average diversification
The 3 months correlation between Transcoal and TNCA is 0.12. Overlapping area represents the amount of risk that can be diversified away by holding Transcoal Pacific Tbk and PT Trimuda Nuansa in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on PT Trimuda Nuansa and Transcoal Pacific 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 Transcoal Pacific Tbk are associated (or correlated) with PT Trimuda. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of PT Trimuda Nuansa has no effect on the direction of Transcoal Pacific i.e., Transcoal Pacific and PT Trimuda go up and down completely randomly.
Pair Corralation between Transcoal Pacific and PT Trimuda
Assuming the 90 days trading horizon Transcoal Pacific Tbk is expected to generate 0.17 times more return on investment than PT Trimuda. However, Transcoal Pacific Tbk is 5.88 times less risky than PT Trimuda. It trades about -0.1 of its potential returns per unit of risk. PT Trimuda Nuansa is currently generating about -0.35 per unit of risk. If you would invest 722,500 in Transcoal Pacific Tbk on August 24, 2024 and sell it today you would lose (20,000) from holding Transcoal Pacific Tbk or give up 2.77% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Transcoal Pacific Tbk vs. PT Trimuda Nuansa
Performance |
| Timeline |
| Transcoal Pacific Tbk |
| PT Trimuda Nuansa |
Transcoal Pacific and PT Trimuda Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Transcoal Pacific and PT Trimuda
The main advantage of trading using opposite Transcoal Pacific and PT Trimuda positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Transcoal Pacific position performs unexpectedly, PT Trimuda 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 Trimuda will offset losses from the drop in PT Trimuda's long position.| Transcoal Pacific vs. Samudera Indonesia Tbk | Transcoal Pacific vs. Steady Safe TBK | Transcoal Pacific vs. Rukun Raharja Tbk | Transcoal Pacific vs. PT Temas Tbk |
| PT Trimuda vs. Guna Timur Raya | PT Trimuda vs. Satria Antaran Prima | PT Trimuda vs. Transcoal Pacific Tbk | PT Trimuda vs. Pelayaran Nelly Dwi |
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 Aroon Oscillator module to analyze current equity momentum using Aroon Oscillator and other momentum ratios.
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