Correlation Between Unilever Indonesia and Tigaraksa Satria
Can any of the company-specific risk be diversified away by investing in both Unilever Indonesia and Tigaraksa Satria 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 Tigaraksa Satria 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 Tigaraksa Satria Tbk, you can compare the effects of market volatilities on Unilever Indonesia and Tigaraksa Satria 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 Tigaraksa Satria. Check out your portfolio center. Please also check ongoing floating volatility patterns of Unilever Indonesia and Tigaraksa Satria.
Diversification Opportunities for Unilever Indonesia and Tigaraksa Satria
0.79 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Unilever and Tigaraksa is 0.79. Overlapping area represents the amount of risk that can be diversified away by holding Unilever Indonesia Tbk and Tigaraksa Satria Tbk in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Tigaraksa Satria Tbk 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 Tigaraksa Satria. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Tigaraksa Satria Tbk has no effect on the direction of Unilever Indonesia i.e., Unilever Indonesia and Tigaraksa Satria go up and down completely randomly.
Pair Corralation between Unilever Indonesia and Tigaraksa Satria
Assuming the 90 days trading horizon Unilever Indonesia Tbk is expected to under-perform the Tigaraksa Satria. In addition to that, Unilever Indonesia is 1.28 times more volatile than Tigaraksa Satria Tbk. It trades about -0.08 of its total potential returns per unit of risk. Tigaraksa Satria Tbk is currently generating about 0.0 per unit of volatility. If you would invest 644,961 in Tigaraksa Satria Tbk on September 3, 2024 and sell it today you would lose (29,961) from holding Tigaraksa Satria Tbk or give up 4.65% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 99.79% |
| Values | Daily Returns |
Unilever Indonesia Tbk vs. Tigaraksa Satria Tbk
Performance |
| Timeline |
| Unilever Indonesia Tbk |
| Tigaraksa Satria Tbk |
Unilever Indonesia and Tigaraksa Satria Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Unilever Indonesia and Tigaraksa Satria
The main advantage of trading using opposite Unilever Indonesia and Tigaraksa Satria positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Unilever Indonesia position performs unexpectedly, Tigaraksa Satria 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 Tigaraksa Satria will offset losses from the drop in Tigaraksa Satria'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 |
| Tigaraksa Satria vs. Astra International Tbk | Tigaraksa Satria vs. Unilever Indonesia Tbk | Tigaraksa Satria vs. Telkom Indonesia Tbk | Tigaraksa Satria vs. Bank Mandiri Persero |
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 Idea Optimizer module to use advanced portfolio builder with pre-computed micro ideas to build optimal portfolio .
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