Correlation Between Trimegah Karya and Equity Development
Can any of the company-specific risk be diversified away by investing in both Trimegah Karya and Equity Development 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 Trimegah Karya and Equity Development into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Trimegah Karya Pratama and Equity Development Investment, you can compare the effects of market volatilities on Trimegah Karya and Equity Development 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 Trimegah Karya with a short position of Equity Development. Check out your portfolio center. Please also check ongoing floating volatility patterns of Trimegah Karya and Equity Development.
Diversification Opportunities for Trimegah Karya and Equity Development
0.31 | Correlation Coefficient |
Weak diversification
The 3 months correlation between Trimegah and Equity is 0.31. Overlapping area represents the amount of risk that can be diversified away by holding Trimegah Karya Pratama and Equity Development Investment in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Equity Development and Trimegah Karya 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 Trimegah Karya Pratama are associated (or correlated) with Equity Development. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Equity Development has no effect on the direction of Trimegah Karya i.e., Trimegah Karya and Equity Development go up and down completely randomly.
Pair Corralation between Trimegah Karya and Equity Development
Assuming the 90 days trading horizon Trimegah Karya Pratama is expected to under-perform the Equity Development. But the stock apears to be less risky and, when comparing its historical volatility, Trimegah Karya Pratama is 1.07 times less risky than Equity Development. The stock trades about -0.04 of its potential returns per unit of risk. The Equity Development Investment is currently generating about 0.05 of returns per unit of risk over similar time horizon. If you would invest 5,200 in Equity Development Investment on September 12, 2024 and sell it today you would earn a total of 400.00 from holding Equity Development Investment or generate 7.69% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Together |
Strength | Very Weak |
Accuracy | 100.0% |
Values | Daily Returns |
Trimegah Karya Pratama vs. Equity Development Investment
Performance |
Timeline |
Trimegah Karya Pratama |
Equity Development |
Trimegah Karya and Equity Development Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Trimegah Karya and Equity Development
The main advantage of trading using opposite Trimegah Karya and Equity Development positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Trimegah Karya position performs unexpectedly, Equity Development 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 Equity Development will offset losses from the drop in Equity Development's long position.Trimegah Karya vs. Hoffmen Cleanindo | Trimegah Karya vs. Communication Cable Systems | Trimegah Karya vs. Victoria Insurance Tbk | Trimegah Karya vs. Indonesian Tobacco Tbk |
Equity Development vs. Pacific Strategic Financial | Equity Development vs. Asuransi Harta Aman | Equity Development vs. Buana Finance Tbk | Equity Development vs. Asuransi Bintang 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 ETFs module to find actively traded Exchange Traded Funds (ETF) from around the world.
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