Correlation Between Timah Persero and Elnusa Tbk
Can any of the company-specific risk be diversified away by investing in both Timah Persero and Elnusa Tbk 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 Timah Persero and Elnusa Tbk into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Timah Persero Tbk and Elnusa Tbk, you can compare the effects of market volatilities on Timah Persero and Elnusa Tbk 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 Timah Persero with a short position of Elnusa Tbk. Check out your portfolio center. Please also check ongoing floating volatility patterns of Timah Persero and Elnusa Tbk.
Diversification Opportunities for Timah Persero and Elnusa Tbk
-0.21 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Timah and Elnusa is -0.21. Overlapping area represents the amount of risk that can be diversified away by holding Timah Persero Tbk and Elnusa Tbk in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Elnusa Tbk and Timah Persero 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 Timah Persero Tbk are associated (or correlated) with Elnusa Tbk. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Elnusa Tbk has no effect on the direction of Timah Persero i.e., Timah Persero and Elnusa Tbk go up and down completely randomly.
Pair Corralation between Timah Persero and Elnusa Tbk
Assuming the 90 days trading horizon Timah Persero Tbk is expected to generate 1.97 times more return on investment than Elnusa Tbk. However, Timah Persero is 1.97 times more volatile than Elnusa Tbk. It trades about 0.07 of its potential returns per unit of risk. Elnusa Tbk is currently generating about -0.06 per unit of risk. If you would invest 100,000 in Timah Persero Tbk on September 2, 2024 and sell it today you would earn a total of 12,000 from holding Timah Persero Tbk or generate 12.0% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Timah Persero Tbk vs. Elnusa Tbk
Performance |
| Timeline |
| Timah Persero Tbk |
| Elnusa Tbk |
Timah Persero and Elnusa Tbk Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Timah Persero and Elnusa Tbk
The main advantage of trading using opposite Timah Persero and Elnusa Tbk positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Timah Persero position performs unexpectedly, Elnusa Tbk 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 Elnusa Tbk will offset losses from the drop in Elnusa Tbk's long position.| Timah Persero vs. Perusahaan Gas Negara | Timah Persero vs. Telkom Indonesia Tbk | Timah Persero vs. Mitra Pinasthika Mustika | Timah Persero vs. Jakarta Int Hotels |
| Elnusa Tbk vs. Mitrabahtera Segara Sejati | Elnusa Tbk vs. Weha Transportasi Indonesia | Elnusa Tbk vs. Rig Tenders 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 Portfolio Analyzer module to portfolio analysis module that provides access to portfolio diagnostics and optimization engine.
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