Correlation Between Indosterling Technomedia and Indorama Synthetics
Can any of the company-specific risk be diversified away by investing in both Indosterling Technomedia and Indorama Synthetics 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 Indosterling Technomedia and Indorama Synthetics into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Indosterling Technomedia Tbk and Indorama Synthetics Tbk, you can compare the effects of market volatilities on Indosterling Technomedia and Indorama Synthetics 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 Indosterling Technomedia with a short position of Indorama Synthetics. Check out your portfolio center. Please also check ongoing floating volatility patterns of Indosterling Technomedia and Indorama Synthetics.
Diversification Opportunities for Indosterling Technomedia and Indorama Synthetics
0.0 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Indosterling and Indorama is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding Indosterling Technomedia Tbk and Indorama Synthetics Tbk in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Indorama Synthetics Tbk and Indosterling Technomedia 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 Indosterling Technomedia Tbk are associated (or correlated) with Indorama Synthetics. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Indorama Synthetics Tbk has no effect on the direction of Indosterling Technomedia i.e., Indosterling Technomedia and Indorama Synthetics go up and down completely randomly.
Pair Corralation between Indosterling Technomedia and Indorama Synthetics
Assuming the 90 days trading horizon Indosterling Technomedia Tbk is expected to under-perform the Indorama Synthetics. In addition to that, Indosterling Technomedia is 1.3 times more volatile than Indorama Synthetics Tbk. It trades about -0.34 of its total potential returns per unit of risk. Indorama Synthetics Tbk is currently generating about -0.06 per unit of volatility. If you would invest 556,647 in Indorama Synthetics Tbk on September 3, 2024 and sell it today you would lose (279,647) from holding Indorama Synthetics Tbk or give up 50.24% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Flat |
| Strength | Insignificant |
| Accuracy | 99.58% |
| Values | Daily Returns |
Indosterling Technomedia Tbk vs. Indorama Synthetics Tbk
Performance |
| Timeline |
| Indosterling Technomedia |
| Indorama Synthetics Tbk |
Indosterling Technomedia and Indorama Synthetics Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Indosterling Technomedia and Indorama Synthetics
The main advantage of trading using opposite Indosterling Technomedia and Indorama Synthetics positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Indosterling Technomedia position performs unexpectedly, Indorama Synthetics 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 Indorama Synthetics will offset losses from the drop in Indorama Synthetics' long position.| Indosterling Technomedia vs. Indointernet Tbk PT | Indosterling Technomedia vs. Multipolar Technology Tbk | Indosterling Technomedia vs. PT Data Sinergitama | Indosterling Technomedia vs. PT Techno9 Indonesia |
| Indorama Synthetics vs. Mitra Pinasthika Mustika | Indorama Synthetics vs. Jakarta Int Hotels | Indorama Synthetics vs. Asuransi Harta Aman | Indorama Synthetics vs. Indosterling Technomedia 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 Balance Of Power module to check stock momentum by analyzing Balance Of Power indicator and other technical ratios.
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