Correlation Between Teladan Prima and Aman Agrindo
Can any of the company-specific risk be diversified away by investing in both Teladan Prima and Aman Agrindo 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 Teladan Prima and Aman Agrindo into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Teladan Prima Agro and Aman Agrindo, you can compare the effects of market volatilities on Teladan Prima and Aman Agrindo 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 Teladan Prima with a short position of Aman Agrindo. Check out your portfolio center. Please also check ongoing floating volatility patterns of Teladan Prima and Aman Agrindo.
Diversification Opportunities for Teladan Prima and Aman Agrindo
-0.52 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Teladan and Aman is -0.52. Overlapping area represents the amount of risk that can be diversified away by holding Teladan Prima Agro and Aman Agrindo in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Aman Agrindo and Teladan Prima 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 Teladan Prima Agro are associated (or correlated) with Aman Agrindo. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Aman Agrindo has no effect on the direction of Teladan Prima i.e., Teladan Prima and Aman Agrindo go up and down completely randomly.
Pair Corralation between Teladan Prima and Aman Agrindo
Assuming the 90 days trading horizon Teladan Prima Agro is expected to under-perform the Aman Agrindo. But the stock apears to be less risky and, when comparing its historical volatility, Teladan Prima Agro is 1.07 times less risky than Aman Agrindo. The stock trades about -0.32 of its potential returns per unit of risk. The Aman Agrindo is currently generating about -0.18 of returns per unit of risk over similar time horizon. If you would invest 36,600 in Aman Agrindo on August 30, 2024 and sell it today you would lose (1,800) from holding Aman Agrindo or give up 4.92% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Teladan Prima Agro vs. Aman Agrindo
Performance |
| Timeline |
| Teladan Prima Agro |
| Aman Agrindo |
Teladan Prima and Aman Agrindo Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Teladan Prima and Aman Agrindo
The main advantage of trading using opposite Teladan Prima and Aman Agrindo positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Teladan Prima position performs unexpectedly, Aman Agrindo 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 Aman Agrindo will offset losses from the drop in Aman Agrindo's long position.| Teladan Prima vs. Sumber Tani Agung | Teladan Prima vs. Wir Asia Tbk | Teladan Prima vs. Triputra Agro Persada | Teladan Prima vs. Net Visi Media |
| Aman Agrindo vs. Putra Rajawali Kencana | Aman Agrindo vs. Sinergi Inti Plastindo | Aman Agrindo vs. Karya Bersama Anugerah | Aman Agrindo vs. Jasnita Telekomindo 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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