Correlation Between Unilever Indonesia and Indocement Tunggal
Can any of the company-specific risk be diversified away by investing in both Unilever Indonesia and Indocement Tunggal 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 Unilever Indonesia and Indocement Tunggal into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Unilever Indonesia Tbk and Indocement Tunggal Prakarsa, you can compare the effects of market volatilities on Unilever Indonesia and Indocement Tunggal 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 Unilever Indonesia with a short position of Indocement Tunggal. Check out your portfolio center. Please also check ongoing floating volatility patterns of Unilever Indonesia and Indocement Tunggal.
Diversification Opportunities for Unilever Indonesia and Indocement Tunggal
0.67 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Unilever and Indocement is 0.67. Overlapping area represents the amount of risk that can be diversified away by holding Unilever Indonesia Tbk and Indocement Tunggal Prakarsa in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Indocement Tunggal and Unilever Indonesia 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 Unilever Indonesia Tbk are associated (or correlated) with Indocement Tunggal. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Indocement Tunggal has no effect on the direction of Unilever Indonesia i.e., Unilever Indonesia and Indocement Tunggal go up and down completely randomly.
Pair Corralation between Unilever Indonesia and Indocement Tunggal
Assuming the 90 days trading horizon Unilever Indonesia Tbk is expected to generate 1.19 times more return on investment than Indocement Tunggal. However, Unilever Indonesia is 1.19 times more volatile than Indocement Tunggal Prakarsa. It trades about -0.22 of its potential returns per unit of risk. Indocement Tunggal Prakarsa is currently generating about -0.6 per unit of risk. If you would invest 177,500 in Unilever Indonesia Tbk on November 4, 2024 and sell it today you would lose (14,000) from holding Unilever Indonesia Tbk or give up 7.89% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Unilever Indonesia Tbk vs. Indocement Tunggal Prakarsa
Performance |
| Timeline |
| Unilever Indonesia Tbk |
| Indocement Tunggal |
Unilever Indonesia and Indocement Tunggal Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Unilever Indonesia and Indocement Tunggal
The main advantage of trading using opposite Unilever Indonesia and Indocement Tunggal positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Unilever Indonesia position performs unexpectedly, Indocement Tunggal 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 Indocement Tunggal will offset losses from the drop in Indocement Tunggal's long position.| Unilever Indonesia vs. PT Indofood Sukses | Unilever Indonesia vs. Astra International Tbk | Unilever Indonesia vs. Telkom Indonesia Tbk | Unilever Indonesia vs. Bank Central Asia |
| Indocement Tunggal vs. Semen Indonesia Persero | Indocement Tunggal vs. United Tractors Tbk | Indocement Tunggal vs. PT Indofood Sukses | Indocement Tunggal vs. Kalbe Farma 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 Top Crypto Exchanges module to search and analyze digital assets across top global cryptocurrency exchanges.
Other Complementary Tools
| Companies Directory Evaluate performance of over 100,000 Stocks, Funds, and ETFs against different fundamentals | |
| Portfolio Diagnostics Use generated alerts and portfolio events aggregator to diagnose current holdings | |
| Headlines Timeline Stay connected to all market stories and filter out noise. Drill down to analyze hype elasticity | |
| Odds Of Bankruptcy Get analysis of equity chance of financial distress in the next 2 years | |
| Price Exposure Probability Analyze equity upside and downside potential for a given time horizon across multiple markets |