Correlation Between Voksel Electric and Matahari Department
Can any of the company-specific risk be diversified away by investing in both Voksel Electric and Matahari Department 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 Voksel Electric and Matahari Department into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Voksel Electric Tbk and Matahari Department Store, you can compare the effects of market volatilities on Voksel Electric and Matahari Department 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 Voksel Electric with a short position of Matahari Department. Check out your portfolio center. Please also check ongoing floating volatility patterns of Voksel Electric and Matahari Department.
Diversification Opportunities for Voksel Electric and Matahari Department
-0.02 | Correlation Coefficient |
Good diversification
The 3 months correlation between Voksel and Matahari is -0.02. Overlapping area represents the amount of risk that can be diversified away by holding Voksel Electric Tbk and Matahari Department Store in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Matahari Department Store and Voksel Electric 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 Voksel Electric Tbk are associated (or correlated) with Matahari Department. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Matahari Department Store has no effect on the direction of Voksel Electric i.e., Voksel Electric and Matahari Department go up and down completely randomly.
Pair Corralation between Voksel Electric and Matahari Department
Assuming the 90 days trading horizon Voksel Electric Tbk is expected to generate 5.08 times more return on investment than Matahari Department. However, Voksel Electric is 5.08 times more volatile than Matahari Department Store. It trades about 0.13 of its potential returns per unit of risk. Matahari Department Store is currently generating about -0.16 per unit of risk. If you would invest 18,700 in Voksel Electric Tbk on September 2, 2024 and sell it today you would earn a total of 13,700 from holding Voksel Electric Tbk or generate 73.26% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Voksel Electric Tbk vs. Matahari Department Store
Performance |
| Timeline |
| Voksel Electric Tbk |
| Matahari Department Store |
Voksel Electric and Matahari Department Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Voksel Electric and Matahari Department
The main advantage of trading using opposite Voksel Electric and Matahari Department positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Voksel Electric position performs unexpectedly, Matahari Department 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 Matahari Department will offset losses from the drop in Matahari Department's long position.| Voksel Electric vs. Supreme Cable Manufacturing | Voksel Electric vs. Kabelindo Murni Tbk | Voksel Electric vs. Tifico Fiber Indonesia | Voksel Electric vs. Trias Sentosa Tbk |
| Matahari Department vs. Japfa Comfeed Indonesia | Matahari Department vs. Charoen Pokphand Indonesia | Matahari Department vs. Erajaya Swasembada Tbk | Matahari Department vs. Indofood Cbp Sukses |
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 Correlation Analysis module to reduce portfolio risk simply by holding instruments which are not perfectly correlated.
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