Correlation Between Trias Sentosa and Tembaga Mulia
Can any of the company-specific risk be diversified away by investing in both Trias Sentosa and Tembaga Mulia 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 Trias Sentosa and Tembaga Mulia into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Trias Sentosa Tbk and Tembaga Mulia Semanan, you can compare the effects of market volatilities on Trias Sentosa and Tembaga Mulia 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 Trias Sentosa with a short position of Tembaga Mulia. Check out your portfolio center. Please also check ongoing floating volatility patterns of Trias Sentosa and Tembaga Mulia.
Diversification Opportunities for Trias Sentosa and Tembaga Mulia
0.29 | Correlation Coefficient |
Modest diversification
The 3 months correlation between Trias and Tembaga is 0.29. Overlapping area represents the amount of risk that can be diversified away by holding Trias Sentosa Tbk and Tembaga Mulia Semanan in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Tembaga Mulia Semanan and Trias Sentosa 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 Trias Sentosa Tbk are associated (or correlated) with Tembaga Mulia. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Tembaga Mulia Semanan has no effect on the direction of Trias Sentosa i.e., Trias Sentosa and Tembaga Mulia go up and down completely randomly.
Pair Corralation between Trias Sentosa and Tembaga Mulia
Assuming the 90 days trading horizon Trias Sentosa Tbk is expected to under-perform the Tembaga Mulia. But the stock apears to be less risky and, when comparing its historical volatility, Trias Sentosa Tbk is 19.3 times less risky than Tembaga Mulia. The stock trades about -0.02 of its potential returns per unit of risk. The Tembaga Mulia Semanan is currently generating about 0.05 of returns per unit of risk over similar time horizon. If you would invest 69,495 in Tembaga Mulia Semanan on August 29, 2024 and sell it today you would earn a total of 23,505 from holding Tembaga Mulia Semanan or generate 33.82% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Trias Sentosa Tbk vs. Tembaga Mulia Semanan
Performance |
| Timeline |
| Trias Sentosa Tbk |
| Tembaga Mulia Semanan |
Trias Sentosa and Tembaga Mulia Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Trias Sentosa and Tembaga Mulia
The main advantage of trading using opposite Trias Sentosa and Tembaga Mulia positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Trias Sentosa position performs unexpectedly, Tembaga Mulia 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 Tembaga Mulia will offset losses from the drop in Tembaga Mulia's long position.| Trias Sentosa vs. Kedaung Indah Can | Trias Sentosa vs. Langgeng Makmur Industri | Trias Sentosa vs. Kabelindo Murni Tbk | Trias Sentosa vs. Mustika Ratu 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 Pattern Recognition module to use different Pattern Recognition models to time the market across multiple global exchanges.
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