Correlation Between Tempo Inti and Sona Topas
Can any of the company-specific risk be diversified away by investing in both Tempo Inti and Sona Topas 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 Tempo Inti and Sona Topas into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Tempo Inti Media and Sona Topas Tourism, you can compare the effects of market volatilities on Tempo Inti and Sona Topas 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 Tempo Inti with a short position of Sona Topas. Check out your portfolio center. Please also check ongoing floating volatility patterns of Tempo Inti and Sona Topas.
Diversification Opportunities for Tempo Inti and Sona Topas
-0.16 | Correlation Coefficient |
Good diversification
The 3 months correlation between Tempo and Sona is -0.16. Overlapping area represents the amount of risk that can be diversified away by holding Tempo Inti Media and Sona Topas Tourism in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Sona Topas Tourism and Tempo Inti 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 Tempo Inti Media are associated (or correlated) with Sona Topas. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Sona Topas Tourism has no effect on the direction of Tempo Inti i.e., Tempo Inti and Sona Topas go up and down completely randomly.
Pair Corralation between Tempo Inti and Sona Topas
Assuming the 90 days trading horizon Tempo Inti is expected to generate 8.92 times less return on investment than Sona Topas. But when comparing it to its historical volatility, Tempo Inti Media is 6.2 times less risky than Sona Topas. It trades about 0.03 of its potential returns per unit of risk. Sona Topas Tourism is currently generating about 0.05 of returns per unit of risk over similar time horizon. If you would invest 182,500 in Sona Topas Tourism on November 2, 2024 and sell it today you would earn a total of 132,500 from holding Sona Topas Tourism or generate 72.6% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Tempo Inti Media vs. Sona Topas Tourism
Performance |
| Timeline |
| Tempo Inti Media |
| Sona Topas Tourism |
Tempo Inti and Sona Topas Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Tempo Inti and Sona Topas
The main advantage of trading using opposite Tempo Inti and Sona Topas positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Tempo Inti position performs unexpectedly, Sona Topas 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 Sona Topas will offset losses from the drop in Sona Topas' long position.| Tempo Inti vs. Wicaksana Overseas International | Tempo Inti vs. Wahana Pronatural | Tempo Inti vs. Tigaraksa Satria Tbk | Tempo Inti vs. Millennium Pharmacon International |
| Sona Topas vs. Lippo General Insurance | Sona Topas vs. Equity Development Investment | Sona Topas vs. Indointernet Tbk PT | Sona Topas vs. Ciptadana Asset Management |
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 Flow Index module to determine momentum by analyzing Money Flow Index and other technical indicators.
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