Correlation Between Tirta Mahakam and Timah Persero
Can any of the company-specific risk be diversified away by investing in both Tirta Mahakam and Timah Persero 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 Tirta Mahakam and Timah Persero into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Tirta Mahakam Resources and Timah Persero Tbk, you can compare the effects of market volatilities on Tirta Mahakam and Timah Persero 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 Tirta Mahakam with a short position of Timah Persero. Check out your portfolio center. Please also check ongoing floating volatility patterns of Tirta Mahakam and Timah Persero.
Diversification Opportunities for Tirta Mahakam and Timah Persero
-0.73 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Tirta and Timah is -0.73. Overlapping area represents the amount of risk that can be diversified away by holding Tirta Mahakam Resources and Timah Persero Tbk in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Timah Persero Tbk and Tirta Mahakam 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 Tirta Mahakam Resources are associated (or correlated) with Timah Persero. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Timah Persero Tbk has no effect on the direction of Tirta Mahakam i.e., Tirta Mahakam and Timah Persero go up and down completely randomly.
Pair Corralation between Tirta Mahakam and Timah Persero
Assuming the 90 days trading horizon Tirta Mahakam Resources is expected to generate 1.61 times more return on investment than Timah Persero. However, Tirta Mahakam is 1.61 times more volatile than Timah Persero Tbk. It trades about 0.27 of its potential returns per unit of risk. Timah Persero Tbk is currently generating about -0.24 per unit of risk. If you would invest 2,400 in Tirta Mahakam Resources on September 5, 2024 and sell it today you would earn a total of 1,000.00 from holding Tirta Mahakam Resources or generate 41.67% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Tirta Mahakam Resources vs. Timah Persero Tbk
Performance |
| Timeline |
| Tirta Mahakam Resources |
| Timah Persero Tbk |
Tirta Mahakam and Timah Persero Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Tirta Mahakam and Timah Persero
The main advantage of trading using opposite Tirta Mahakam and Timah Persero positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Tirta Mahakam position performs unexpectedly, Timah Persero 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 Timah Persero will offset losses from the drop in Timah Persero's long position.| Tirta Mahakam vs. Mitra Pinasthika Mustika | Tirta Mahakam vs. Jakarta Int Hotels | Tirta Mahakam vs. Asuransi Harta Aman | Tirta Mahakam vs. Indosterling Technomedia Tbk |
| Timah Persero vs. Mitra Pinasthika Mustika | Timah Persero vs. Jakarta Int Hotels | Timah Persero vs. Asuransi Harta Aman | Timah Persero 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 Money Managers module to screen money managers from public funds and ETFs managed around the world.
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