Correlation Between Trust Finance and Victoria Insurance
Can any of the company-specific risk be diversified away by investing in both Trust Finance and Victoria Insurance 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 Victoria Insurance 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 Victoria Insurance Tbk, you can compare the effects of market volatilities on Trust Finance and Victoria Insurance 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 Victoria Insurance. Check out your portfolio center. Please also check ongoing floating volatility patterns of Trust Finance and Victoria Insurance.
Diversification Opportunities for Trust Finance and Victoria Insurance
-0.34 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Trust and Victoria is -0.34. Overlapping area represents the amount of risk that can be diversified away by holding Trust Finance Indonesia and Victoria Insurance Tbk in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Victoria Insurance 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 Victoria Insurance. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Victoria Insurance Tbk has no effect on the direction of Trust Finance i.e., Trust Finance and Victoria Insurance go up and down completely randomly.
Pair Corralation between Trust Finance and Victoria Insurance
Assuming the 90 days trading horizon Trust Finance Indonesia is expected to generate 0.65 times more return on investment than Victoria Insurance. However, Trust Finance Indonesia is 1.53 times less risky than Victoria Insurance. It trades about 0.03 of its potential returns per unit of risk. Victoria Insurance Tbk is currently generating about 0.01 per unit of risk. If you would invest 41,000 in Trust Finance Indonesia on August 26, 2024 and sell it today you would earn a total of 3,800 from holding Trust Finance Indonesia or generate 9.27% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Trust Finance Indonesia vs. Victoria Insurance Tbk
Performance |
| Timeline |
| Trust Finance Indonesia |
| Victoria Insurance Tbk |
Trust Finance and Victoria Insurance Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Trust Finance and Victoria Insurance
The main advantage of trading using opposite Trust Finance and Victoria Insurance positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Trust Finance position performs unexpectedly, Victoria Insurance 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 Victoria Insurance will offset losses from the drop in Victoria Insurance's long position.| Trust Finance vs. Paninvest Tbk | Trust Finance vs. Panin Sekuritas Tbk | Trust Finance vs. Wahana Ottomitra Multiartha | Trust Finance vs. Lenox Pasifik Investama |
| Victoria Insurance vs. Victoria Investama Tbk | Victoria Insurance vs. Verena Multi Finance | Victoria Insurance vs. Asuransi Harta Aman | Victoria Insurance vs. Trust Finance Indonesia |
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 Earnings Calls module to check upcoming earnings announcements updated hourly across public exchanges.
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