Correlation Between Victoria Insurance and Humpuss Intermoda
Can any of the company-specific risk be diversified away by investing in both Victoria Insurance and Humpuss Intermoda 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 Victoria Insurance and Humpuss Intermoda into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Victoria Insurance Tbk and Humpuss Intermoda Transportasi, you can compare the effects of market volatilities on Victoria Insurance and Humpuss Intermoda 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 Victoria Insurance with a short position of Humpuss Intermoda. Check out your portfolio center. Please also check ongoing floating volatility patterns of Victoria Insurance and Humpuss Intermoda.
Diversification Opportunities for Victoria Insurance and Humpuss Intermoda
-0.55 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Victoria and Humpuss is -0.55. Overlapping area represents the amount of risk that can be diversified away by holding Victoria Insurance Tbk and Humpuss Intermoda Transportasi in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Humpuss Intermoda and Victoria Insurance 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 Victoria Insurance Tbk are associated (or correlated) with Humpuss Intermoda. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Humpuss Intermoda has no effect on the direction of Victoria Insurance i.e., Victoria Insurance and Humpuss Intermoda go up and down completely randomly.
Pair Corralation between Victoria Insurance and Humpuss Intermoda
Assuming the 90 days trading horizon Victoria Insurance Tbk is expected to under-perform the Humpuss Intermoda. But the stock apears to be less risky and, when comparing its historical volatility, Victoria Insurance Tbk is 6.11 times less risky than Humpuss Intermoda. The stock trades about -0.28 of its potential returns per unit of risk. The Humpuss Intermoda Transportasi is currently generating about 0.25 of returns per unit of risk over similar time horizon. If you would invest 30,200 in Humpuss Intermoda Transportasi on August 27, 2024 and sell it today you would earn a total of 10,000 from holding Humpuss Intermoda Transportasi or generate 33.11% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Victoria Insurance Tbk vs. Humpuss Intermoda Transportasi
Performance |
| Timeline |
| Victoria Insurance Tbk |
| Humpuss Intermoda |
Victoria Insurance and Humpuss Intermoda Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Victoria Insurance and Humpuss Intermoda
The main advantage of trading using opposite Victoria Insurance and Humpuss Intermoda positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Victoria Insurance position performs unexpectedly, Humpuss Intermoda 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 Humpuss Intermoda will offset losses from the drop in Humpuss Intermoda's long position.The idea behind Victoria Insurance Tbk and Humpuss Intermoda Transportasi pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.| Humpuss Intermoda vs. PT MNC Energy | Humpuss Intermoda vs. Tanah Laut Tbk | Humpuss Intermoda vs. Indorama Synthetics Tbk | Humpuss Intermoda vs. Fortune Mate Indonesia |
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 Technical Analysis module to check basic technical indicators and analysis based on most latest market data.
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