Correlation Between Unggul Indah and Trias Sentosa
Can any of the company-specific risk be diversified away by investing in both Unggul Indah and Trias Sentosa 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 Unggul Indah and Trias Sentosa into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Unggul Indah Cahaya and Trias Sentosa Tbk, you can compare the effects of market volatilities on Unggul Indah and Trias Sentosa 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 Unggul Indah with a short position of Trias Sentosa. Check out your portfolio center. Please also check ongoing floating volatility patterns of Unggul Indah and Trias Sentosa.
Diversification Opportunities for Unggul Indah and Trias Sentosa
0.04 | Correlation Coefficient |
Significant diversification
The 3 months correlation between Unggul and Trias is 0.04. Overlapping area represents the amount of risk that can be diversified away by holding Unggul Indah Cahaya and Trias Sentosa Tbk in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Trias Sentosa Tbk and Unggul Indah 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 Unggul Indah Cahaya are associated (or correlated) with Trias Sentosa. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Trias Sentosa Tbk has no effect on the direction of Unggul Indah i.e., Unggul Indah and Trias Sentosa go up and down completely randomly.
Pair Corralation between Unggul Indah and Trias Sentosa
Assuming the 90 days trading horizon Unggul Indah Cahaya is expected to under-perform the Trias Sentosa. But the stock apears to be less risky and, when comparing its historical volatility, Unggul Indah Cahaya is 1.96 times less risky than Trias Sentosa. The stock trades about -0.3 of its potential returns per unit of risk. The Trias Sentosa Tbk is currently generating about 0.0 of returns per unit of risk over similar time horizon. If you would invest 50,000 in Trias Sentosa Tbk on August 29, 2024 and sell it today you would earn a total of 0.00 from holding Trias Sentosa Tbk or generate 0.0% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Unggul Indah Cahaya vs. Trias Sentosa Tbk
Performance |
| Timeline |
| Unggul Indah Cahaya |
| Trias Sentosa Tbk |
Unggul Indah and Trias Sentosa Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Unggul Indah and Trias Sentosa
The main advantage of trading using opposite Unggul Indah and Trias Sentosa positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Unggul Indah position performs unexpectedly, Trias Sentosa 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 Trias Sentosa will offset losses from the drop in Trias Sentosa's long position.| Unggul Indah vs. Kedaung Indah Can | Unggul Indah vs. Langgeng Makmur Industri | Unggul Indah vs. Kabelindo Murni Tbk | Unggul Indah vs. Mustika Ratu Tbk |
| 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 Pair Correlation module to compare performance and examine fundamental relationship between any two equity instruments.
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