Correlation Between Victoria Insurance and PT Trimegah
Can any of the company-specific risk be diversified away by investing in both Victoria Insurance and PT Trimegah 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 PT Trimegah 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 PT Trimegah Bangun, you can compare the effects of market volatilities on Victoria Insurance and PT Trimegah 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 PT Trimegah. Check out your portfolio center. Please also check ongoing floating volatility patterns of Victoria Insurance and PT Trimegah.
Diversification Opportunities for Victoria Insurance and PT Trimegah
0.41 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Victoria and NCKL is 0.41. Overlapping area represents the amount of risk that can be diversified away by holding Victoria Insurance Tbk and PT Trimegah Bangun in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on PT Trimegah Bangun 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 PT Trimegah. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of PT Trimegah Bangun has no effect on the direction of Victoria Insurance i.e., Victoria Insurance and PT Trimegah go up and down completely randomly.
Pair Corralation between Victoria Insurance and PT Trimegah
Assuming the 90 days trading horizon Victoria Insurance Tbk is expected to under-perform the PT Trimegah. But the stock apears to be less risky and, when comparing its historical volatility, Victoria Insurance Tbk is 1.25 times less risky than PT Trimegah. The stock trades about -0.24 of its potential returns per unit of risk. The PT Trimegah Bangun is currently generating about -0.17 of returns per unit of risk over similar time horizon. If you would invest 87,500 in PT Trimegah Bangun on September 4, 2024 and sell it today you would lose (5,000) from holding PT Trimegah Bangun or give up 5.71% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 95.24% |
| Values | Daily Returns |
Victoria Insurance Tbk vs. PT Trimegah Bangun
Performance |
| Timeline |
| Victoria Insurance Tbk |
| PT Trimegah Bangun |
Victoria Insurance and PT Trimegah Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Victoria Insurance and PT Trimegah
The main advantage of trading using opposite Victoria Insurance and PT Trimegah positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Victoria Insurance position performs unexpectedly, PT Trimegah 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 PT Trimegah will offset losses from the drop in PT Trimegah's long position.| Victoria Insurance vs. Paninvest Tbk | Victoria Insurance vs. Mitra Pinasthika Mustika | Victoria Insurance vs. Jakarta Int Hotels | Victoria Insurance vs. Asuransi Harta Aman |
| PT Trimegah vs. Arkadia Digital Media | PT Trimegah vs. Grand Kartech Tbk | PT Trimegah vs. Victoria Insurance Tbk | PT Trimegah vs. Nanotech Indonesia Global |
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 Content Syndication module to quickly integrate customizable finance content to your own investment portal.
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