Correlation Between Unilever Indonesia and Trias Sentosa
Can any of the company-specific risk be diversified away by investing in both Unilever Indonesia 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 Unilever Indonesia and Trias Sentosa 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 Trias Sentosa Tbk, you can compare the effects of market volatilities on Unilever Indonesia 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 Unilever Indonesia with a short position of Trias Sentosa. Check out your portfolio center. Please also check ongoing floating volatility patterns of Unilever Indonesia and Trias Sentosa.
Diversification Opportunities for Unilever Indonesia and Trias Sentosa
-0.48 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Unilever and Trias is -0.48. Overlapping area represents the amount of risk that can be diversified away by holding Unilever Indonesia Tbk 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 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 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 Unilever Indonesia i.e., Unilever Indonesia and Trias Sentosa go up and down completely randomly.
Pair Corralation between Unilever Indonesia and Trias Sentosa
Assuming the 90 days trading horizon Unilever Indonesia Tbk is expected to under-perform the Trias Sentosa. But the stock apears to be less risky and, when comparing its historical volatility, Unilever Indonesia Tbk is 1.2 times less risky than Trias Sentosa. The stock trades about -0.09 of its potential returns per unit of risk. The Trias Sentosa Tbk is currently generating about 0.01 of returns per unit of risk over similar time horizon. If you would invest 50,000 in Trias Sentosa Tbk on September 1, 2024 and sell it today you would lose (1,000.00) from holding Trias Sentosa Tbk or give up 2.0% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Unilever Indonesia Tbk vs. Trias Sentosa Tbk
Performance |
| Timeline |
| Unilever Indonesia Tbk |
| Trias Sentosa Tbk |
Unilever Indonesia and Trias Sentosa Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Unilever Indonesia and Trias Sentosa
The main advantage of trading using opposite Unilever Indonesia and Trias Sentosa positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Unilever Indonesia 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.| Unilever Indonesia vs. PT Indofood Sukses | Unilever Indonesia vs. Astra International Tbk | Unilever Indonesia vs. Telkom Indonesia Tbk | Unilever Indonesia vs. Bank Central Asia |
| Trias Sentosa vs. Perusahaan Gas Negara | Trias Sentosa vs. Telkom Indonesia Tbk | Trias Sentosa vs. Mitra Pinasthika Mustika | Trias Sentosa vs. Jakarta Int Hotels |
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 Positions Ratings module to determine portfolio positions ratings based on digital equity recommendations. Macroaxis instant position ratings are based on combination of fundamental analysis and risk-adjusted market performance.
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