Correlation Between Integra Indocabinet and Communication Cable
Can any of the company-specific risk be diversified away by investing in both Integra Indocabinet and Communication Cable 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 Integra Indocabinet and Communication Cable into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Integra Indocabinet Tbk and Communication Cable Systems, you can compare the effects of market volatilities on Integra Indocabinet and Communication Cable 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 Integra Indocabinet with a short position of Communication Cable. Check out your portfolio center. Please also check ongoing floating volatility patterns of Integra Indocabinet and Communication Cable.
Diversification Opportunities for Integra Indocabinet and Communication Cable
-0.75 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Integra and Communication is -0.75. Overlapping area represents the amount of risk that can be diversified away by holding Integra Indocabinet Tbk and Communication Cable Systems in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Communication Cable and Integra Indocabinet 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 Integra Indocabinet Tbk are associated (or correlated) with Communication Cable. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Communication Cable has no effect on the direction of Integra Indocabinet i.e., Integra Indocabinet and Communication Cable go up and down completely randomly.
Pair Corralation between Integra Indocabinet and Communication Cable
Assuming the 90 days trading horizon Integra Indocabinet is expected to generate 1.22 times less return on investment than Communication Cable. But when comparing it to its historical volatility, Integra Indocabinet Tbk is 1.35 times less risky than Communication Cable. It trades about 0.09 of its potential returns per unit of risk. Communication Cable Systems is currently generating about 0.08 of returns per unit of risk over similar time horizon. If you would invest 24,600 in Communication Cable Systems on August 30, 2024 and sell it today you would earn a total of 1,800 from holding Communication Cable Systems or generate 7.32% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Integra Indocabinet Tbk vs. Communication Cable Systems
Performance |
| Timeline |
| Integra Indocabinet Tbk |
| Communication Cable |
Integra Indocabinet and Communication Cable Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Integra Indocabinet and Communication Cable
The main advantage of trading using opposite Integra Indocabinet and Communication Cable positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Integra Indocabinet position performs unexpectedly, Communication Cable 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 Communication Cable will offset losses from the drop in Communication Cable's long position.| Integra Indocabinet vs. Buyung Poetra Sembada | Integra Indocabinet vs. Erajaya Swasembada Tbk | Integra Indocabinet vs. Sariguna Primatirta PT | Integra Indocabinet vs. Puradelta Lestari PT |
| Communication Cable vs. Hartadinata Abadi Tbk | Communication Cable vs. Estika Tata Tiara | Communication Cable vs. Garudafood Putra Putri | Communication Cable vs. PT Indonesia Kendaraan |
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 Economic Indicators module to top statistical indicators that provide insights into how an economy is performing.
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