Correlation Between Victoria Insurance and Victoria Investama
Can any of the company-specific risk be diversified away by investing in both Victoria Insurance and Victoria Investama 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 Victoria Investama 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 Victoria Investama Tbk, you can compare the effects of market volatilities on Victoria Insurance and Victoria Investama 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 Victoria Investama. Check out your portfolio center. Please also check ongoing floating volatility patterns of Victoria Insurance and Victoria Investama.
Diversification Opportunities for Victoria Insurance and Victoria Investama
-0.34 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Victoria and Victoria is -0.34. Overlapping area represents the amount of risk that can be diversified away by holding Victoria Insurance Tbk and Victoria Investama Tbk in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Victoria Investama Tbk 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 Victoria Investama. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Victoria Investama Tbk has no effect on the direction of Victoria Insurance i.e., Victoria Insurance and Victoria Investama go up and down completely randomly.
Pair Corralation between Victoria Insurance and Victoria Investama
Assuming the 90 days trading horizon Victoria Insurance Tbk is expected to under-perform the Victoria Investama. But the stock apears to be less risky and, when comparing its historical volatility, Victoria Insurance Tbk is 4.44 times less risky than Victoria Investama. The stock trades about -0.08 of its potential returns per unit of risk. The Victoria Investama Tbk is currently generating about 0.14 of returns per unit of risk over similar time horizon. If you would invest 15,100 in Victoria Investama Tbk on August 30, 2024 and sell it today you would earn a total of 5,500 from holding Victoria Investama Tbk or generate 36.42% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Victoria Insurance Tbk vs. Victoria Investama Tbk
Performance |
| Timeline |
| Victoria Insurance Tbk |
| Victoria Investama Tbk |
Victoria Insurance and Victoria Investama Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Victoria Insurance and Victoria Investama
The main advantage of trading using opposite Victoria Insurance and Victoria Investama positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Victoria Insurance position performs unexpectedly, Victoria Investama 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 Victoria Investama will offset losses from the drop in Victoria Investama's long position.| Victoria Insurance vs. Bank Cimb Niaga | Victoria Insurance vs. Indosat Tbk | Victoria Insurance vs. Astra Agro Lestari | Victoria Insurance vs. Bank Mandiri Persero |
| Victoria Investama vs. Victoria Insurance Tbk | Victoria Investama vs. Verena Multi Finance | Victoria Investama vs. Trimegah Securities Tbk | Victoria Investama vs. Tifa Finance 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 Premium Stories module to follow Macroaxis premium stories from verified contributors across different equity types, categories and coverage scope.
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