Correlation Between Timah Persero and Impack Pratama
Can any of the company-specific risk be diversified away by investing in both Timah Persero and Impack Pratama 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 Impack Pratama 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 Impack Pratama Industri, you can compare the effects of market volatilities on Timah Persero and Impack Pratama 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 Impack Pratama. Check out your portfolio center. Please also check ongoing floating volatility patterns of Timah Persero and Impack Pratama.
Diversification Opportunities for Timah Persero and Impack Pratama
-0.21 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Timah and Impack is -0.21. Overlapping area represents the amount of risk that can be diversified away by holding Timah Persero Tbk and Impack Pratama Industri in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Impack Pratama Industri 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 Impack Pratama. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Impack Pratama Industri has no effect on the direction of Timah Persero i.e., Timah Persero and Impack Pratama go up and down completely randomly.
Pair Corralation between Timah Persero and Impack Pratama
Assuming the 90 days trading horizon Timah Persero Tbk is expected to generate 2.04 times more return on investment than Impack Pratama. However, Timah Persero is 2.04 times more volatile than Impack Pratama Industri. It trades about 0.07 of its potential returns per unit of risk. Impack Pratama Industri is currently generating about 0.01 per unit of risk. If you would invest 100,500 in Timah Persero Tbk on September 3, 2024 and sell it today you would earn a total of 11,500 from holding Timah Persero Tbk or generate 11.44% 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. Impack Pratama Industri
Performance |
| Timeline |
| Timah Persero Tbk |
| Impack Pratama Industri |
Timah Persero and Impack Pratama Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Timah Persero and Impack Pratama
The main advantage of trading using opposite Timah Persero and Impack Pratama positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Timah Persero position performs unexpectedly, Impack Pratama 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 Impack Pratama will offset losses from the drop in Impack Pratama's long position.| Timah Persero vs. Vale Indonesia Tbk | Timah Persero vs. Aneka Tambang Persero | Timah Persero vs. Bukit Asam Tbk | Timah Persero vs. Perusahaan Gas Negara |
| Impack Pratama vs. Timah Persero Tbk | Impack Pratama vs. Semen Indonesia Persero | Impack Pratama vs. Mitra Pinasthika Mustika | Impack Pratama vs. Jakarta Int Hotels |
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 Premium Stories module to follow Macroaxis premium stories from verified contributors across different equity types, categories and coverage scope.
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