Correlation Between Tifa Finance and Equity Development
Can any of the company-specific risk be diversified away by investing in both Tifa Finance and Equity Development 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 Tifa Finance and Equity Development into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Tifa Finance Tbk and Equity Development Investment, you can compare the effects of market volatilities on Tifa Finance and Equity Development 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 Tifa Finance with a short position of Equity Development. Check out your portfolio center. Please also check ongoing floating volatility patterns of Tifa Finance and Equity Development.
Diversification Opportunities for Tifa Finance and Equity Development
-0.25 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Tifa and Equity is -0.25. Overlapping area represents the amount of risk that can be diversified away by holding Tifa Finance Tbk and Equity Development Investment in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Equity Development and Tifa Finance 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 Tifa Finance Tbk are associated (or correlated) with Equity Development. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Equity Development has no effect on the direction of Tifa Finance i.e., Tifa Finance and Equity Development go up and down completely randomly.
Pair Corralation between Tifa Finance and Equity Development
Assuming the 90 days trading horizon Tifa Finance Tbk is expected to under-perform the Equity Development. But the stock apears to be less risky and, when comparing its historical volatility, Tifa Finance Tbk is 1.24 times less risky than Equity Development. The stock trades about -0.01 of its potential returns per unit of risk. The Equity Development Investment is currently generating about 0.0 of returns per unit of risk over similar time horizon. If you would invest 6,200 in Equity Development Investment on September 2, 2024 and sell it today you would lose (300.00) from holding Equity Development Investment or give up 4.84% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Tifa Finance Tbk vs. Equity Development Investment
Performance |
| Timeline |
| Tifa Finance Tbk |
| Equity Development |
Tifa Finance and Equity Development Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Tifa Finance and Equity Development
The main advantage of trading using opposite Tifa Finance and Equity Development positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Tifa Finance position performs unexpectedly, Equity Development 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 Equity Development will offset losses from the drop in Equity Development's long position.| Tifa Finance vs. Ace Hardware Indonesia | Tifa Finance vs. Merdeka Copper Gold | Tifa Finance vs. Mitra Pinasthika Mustika | Tifa Finance vs. Jakarta Int Hotels |
| Equity Development vs. Pacific Strategic Financial | Equity Development vs. Asuransi Harta Aman | Equity Development vs. Buana Finance Tbk | Equity Development vs. Asuransi Bintang 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 Stock Screener module to find equities using a custom stock filter or screen asymmetry in trading patterns, price, volume, or investment outlook..
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