Correlation Between Trust Finance and Reliance Securities
Can any of the company-specific risk be diversified away by investing in both Trust Finance and Reliance Securities 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 Trust Finance and Reliance Securities into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Trust Finance Indonesia and Reliance Securities Tbk, you can compare the effects of market volatilities on Trust Finance and Reliance Securities 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 Trust Finance with a short position of Reliance Securities. Check out your portfolio center. Please also check ongoing floating volatility patterns of Trust Finance and Reliance Securities.
Diversification Opportunities for Trust Finance and Reliance Securities
0.02 | Correlation Coefficient |
Significant diversification
The 3 months correlation between Trust and Reliance is 0.02. Overlapping area represents the amount of risk that can be diversified away by holding Trust Finance Indonesia and Reliance Securities Tbk in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Reliance Securities Tbk and Trust Finance 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 Trust Finance Indonesia are associated (or correlated) with Reliance Securities. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Reliance Securities Tbk has no effect on the direction of Trust Finance i.e., Trust Finance and Reliance Securities go up and down completely randomly.
Pair Corralation between Trust Finance and Reliance Securities
Assuming the 90 days trading horizon Trust Finance Indonesia is expected to generate 0.78 times more return on investment than Reliance Securities. However, Trust Finance Indonesia is 1.29 times less risky than Reliance Securities. It trades about 0.05 of its potential returns per unit of risk. Reliance Securities Tbk is currently generating about 0.0 per unit of risk. If you would invest 42,800 in Trust Finance Indonesia on August 28, 2024 and sell it today you would earn a total of 2,000 from holding Trust Finance Indonesia or generate 4.67% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Trust Finance Indonesia vs. Reliance Securities Tbk
Performance |
| Timeline |
| Trust Finance Indonesia |
| Reliance Securities Tbk |
Trust Finance and Reliance Securities Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Trust Finance and Reliance Securities
The main advantage of trading using opposite Trust Finance and Reliance Securities positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Trust Finance position performs unexpectedly, Reliance Securities 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 Reliance Securities will offset losses from the drop in Reliance Securities' long position.| Trust Finance vs. Wahana Ottomitra Multiartha | Trust Finance vs. Yulie Sekurindo Tbk | Trust Finance vs. Trimegah Securities Tbk | Trust Finance vs. Mandala Multifinance Tbk |
| Reliance Securities vs. Panca Global Securities | Reliance Securities vs. Panin Sekuritas Tbk | Reliance Securities vs. Trimegah Securities Tbk | Reliance Securities vs. Yulie Sekurindo 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 Sign In To Macroaxis module to sign in to explore Macroaxis' wealth optimization platform and fintech modules.
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