Correlation Between Teladan Prima and Triputra Agro
Can any of the company-specific risk be diversified away by investing in both Teladan Prima and Triputra Agro 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 Triputra Agro 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 Triputra Agro Persada, you can compare the effects of market volatilities on Teladan Prima and Triputra Agro 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 Triputra Agro. Check out your portfolio center. Please also check ongoing floating volatility patterns of Teladan Prima and Triputra Agro.
Diversification Opportunities for Teladan Prima and Triputra Agro
0.79 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Teladan and Triputra is 0.79. Overlapping area represents the amount of risk that can be diversified away by holding Teladan Prima Agro and Triputra Agro Persada in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Triputra Agro Persada 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 Triputra Agro. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Triputra Agro Persada has no effect on the direction of Teladan Prima i.e., Teladan Prima and Triputra Agro go up and down completely randomly.
Pair Corralation between Teladan Prima and Triputra Agro
Assuming the 90 days trading horizon Teladan Prima Agro is expected to under-perform the Triputra Agro. But the stock apears to be less risky and, when comparing its historical volatility, Teladan Prima Agro is 2.05 times less risky than Triputra Agro. The stock trades about -0.32 of its potential returns per unit of risk. The Triputra Agro Persada is currently generating about -0.15 of returns per unit of risk over similar time horizon. If you would invest 83,796 in Triputra Agro Persada on August 30, 2024 and sell it today you would lose (6,796) from holding Triputra Agro Persada or give up 8.11% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Teladan Prima Agro vs. Triputra Agro Persada
Performance |
| Timeline |
| Teladan Prima Agro |
| Triputra Agro Persada |
Teladan Prima and Triputra Agro Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Teladan Prima and Triputra Agro
The main advantage of trading using opposite Teladan Prima and Triputra Agro positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Teladan Prima position performs unexpectedly, Triputra Agro 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 Triputra Agro will offset losses from the drop in Triputra Agro'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 |
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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 Economic Indicators module to top statistical indicators that provide insights into how an economy is performing.
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