Correlation Between Integra Indocabinet and GTS Internasional
Can any of the company-specific risk be diversified away by investing in both Integra Indocabinet and GTS Internasional 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 GTS Internasional 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 GTS Internasional Tbk, you can compare the effects of market volatilities on Integra Indocabinet and GTS Internasional 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 GTS Internasional. Check out your portfolio center. Please also check ongoing floating volatility patterns of Integra Indocabinet and GTS Internasional.
Diversification Opportunities for Integra Indocabinet and GTS Internasional
0.65 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Integra and GTS is 0.65. Overlapping area represents the amount of risk that can be diversified away by holding Integra Indocabinet Tbk and GTS Internasional Tbk in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on GTS Internasional Tbk 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 GTS Internasional. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of GTS Internasional Tbk has no effect on the direction of Integra Indocabinet i.e., Integra Indocabinet and GTS Internasional go up and down completely randomly.
Pair Corralation between Integra Indocabinet and GTS Internasional
Assuming the 90 days trading horizon Integra Indocabinet Tbk is expected to generate 0.88 times more return on investment than GTS Internasional. However, Integra Indocabinet Tbk is 1.14 times less risky than GTS Internasional. It trades about 0.09 of its potential returns per unit of risk. GTS Internasional Tbk is currently generating about -0.01 per unit of risk. If you would invest 22,800 in Integra Indocabinet Tbk on September 1, 2024 and sell it today you would earn a total of 9,000 from holding Integra Indocabinet Tbk or generate 39.47% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Integra Indocabinet Tbk vs. GTS Internasional Tbk
Performance |
| Timeline |
| Integra Indocabinet Tbk |
| GTS Internasional Tbk |
Integra Indocabinet and GTS Internasional Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Integra Indocabinet and GTS Internasional
The main advantage of trading using opposite Integra Indocabinet and GTS Internasional positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Integra Indocabinet position performs unexpectedly, GTS Internasional 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 GTS Internasional will offset losses from the drop in GTS Internasional'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 |
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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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